Preamble

The House met at half-past Nine o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Orders of the Day — Merchant Shipping (Liner Conferences) Bill

As amended (in the Standing Committee), considered.

New Clause 1

LIABILITY OF MEMBERS OF CONFERENCE TO BE IN PROPORTION TO THEIR RESPONSIBILITY

'.—(1) Where proceedings arising out of the Code are brought against a member of a conference in respect of damage or loss suffered by any person and other members of the conference are also liable (whether jointly or otherwise) in respect of the same damage or loss, the liability of that member to make good that damage or loss shall be in proportion to his responsibility.

The reference above to the liability of other members of the conference is to any such liability which has been or could be established in proceedings brought before the same court or other tribunal by or on behalf of the person suffering the damage or loss; and for the purposes of this subsection it is immaterial by reference to what law the issue of liability was, or would be determined.

(2)In ascertaining the responsibility of a member of a conference for the purposes of subsection (1), regard shall be had not only to the member's part (if any) in the particular matters giving rise to the proceedings but also to his general involvement in the affairs of the conference as shown, for example, by his share of the conference trade, the nature of pooling arrangements to which he is a party and the extent to which he contributes to the administrative expenses of the conference.

(3)Subsections (1) and (2) apply to any proceedings in the United Kingdom and to proceedings elswhere in which the extent of the liability of a member of a conference falls to be determined by reference to the law of a part of the United Kingdom.

(4)Where in proceedings arising out of the Code—
(a) judgment is given against a member of a conference in respect of damage or loss caused to any person, and
(b) the extent of the member's liability is not determined by reference to subsections (1) and (2),
the member shall not, if it is sought to enforce the judgment in the United Kingdom, be liable to make good any greater proportion of that damage or loss than if the extent of his liability had been determined by reference to those subsections.

(5)A member of an unincorporated conference against which judgment is given, whether in the United Kingdom or elsewhere, in proceedings arising out of the Code in respect of damage or loss caused by any person by a breach of duty by the conference, shall not, by virtue of section 5(3), be liable to make good any greater proportion of that damage or loss than he would have been if the proceedings had been brought against him and the other members of the conference in respect of a duty owed by all the members of the conference and the extent of his liability had been determined by reference to subsections (1) and (2).

(6) subsections (4) and (5) shall not affect the ecforcement in the United Kingdom of a judgment required to be enforced

thereby by virtue of Part I of the Foreign Judgments (Reciprocal Enforcement) Act 1933 (judgments given in countries with whom reciprocal arrangements exist) or Part I of the Civil Jurisdiction and Judgments Act 1982 (judgments given in other E. E.0 . member states).'.—[Mr. Sproat.]

Brought up, and read the First time.

The Under-Secretary of State for Trade (Mr. Ian Sproat): I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this, it will be convenient to take Government amendments Nos. 3, 4, 5, 6, 7, and 9.

Mr. Sproat: The new clause will replace clause 9 as a result of concern expressed to us especially by the General Council of British Shipping that clause 9 as drafted protected shipping lines only in limited cases. The purpose of clause 9 was to ensure that British shipping lines or other shipping lines with substantial assets here were not unduly prejudiced by the efficiency of the British legal system. Where a person—I am speaking of shipping lines rather than of shippers of goods—suffers damage as a result of a failure by the conference to fulfil its code obligations, for example, to admit that person into the conference it might be easy to sue the conference in the United Kingdom and by virtue of clause 5 enforce that obligation against a shipping line here. While a shipping line would have a right of recourse against fellow conference members, such a right may not be very useful in, say, Ruritania, if the currency of that country cannot be changed into sterling.
Clause 9 limited the member's responsiblity here to a "just and equitable" share. However, clause 9 dealt only with enforcement against members of judgments given against conferences. What if the original proceedings and judgment were against an individual member or members? Clause 3(7) would have enabled us to make similar provisions in regulations protecting members. Accordingly, sub section (1) provides that, in any case where proceedings arising out of the code are brought against a member of a conference and other members could also be sued for the same liability, liability of the member shall be only in proportion to his responsibility Subsection (2) repeats clause 9(2) in explaining how a member's responsibility is to be worked out. Subsection (3) explains that subsections (1) and (2) apply not only to proceedings in the United Kingdom but elsewhere if United Kingdom law applies, for example, because that is the law being applied to a case before international mandatory conciliation.
Subsection (4) deals with judgments given against members where the law of some other State applies. That is usually because a case is before a foreign court in the same way as subsection (1) deals with judgments given in the United Kingdom. Subsection (5) repeats clause 9(1)(a) that deals with enforcement against members of judgments against unincorporated conferences. Subsection (6) provides a saving for the cases where, as a result of our international obligations, we are required to enforce without qualification judgments given abroad.
The other amendments grouped with the new clause are consequential to it . Amendment No.3 brings the wording of clause 5(2) into line with the wording of subsection (3) of the new clause and makes it clear that the provisions of


clause 5(1) apply not merely in cases before courts of the United Kingdom but also where United Kingdom law is applied, for example, again, in international mandatory conciliation. Amendment No. 4 replaces reference to clause 9 by reference to the new clause. Amendment No. 5 deletes clause 5(5) dealing with the definition of the judgment which now appears in clause 13. The definition now includes a reference to the word "decree" for the purposes of Scottish law. Amendment No. 6 also adds the word "decree" after "judgment" in clause 8 since there the word "judgment" is not used in relation to proceedings arising out of the code.
I hope that my explanation and clarification, which I think met the wishes of hon. Members in Committee, will satisfy the House.

Mr. Terence Higgins: I recall that when I had closer connections with the shipping industry it used to be the practice for the captain of a vessel, if he had been through a bad storm, to go to a notary and register a protest when he had arrived in port, as a result of which he was exonerated to some extent from any damage that was caused to the cargo because of the bad weather.
I should like to register a protest about the new clause. As we are on Report, it is possible, unlike a Committee stage, for hon. Members to speak only once, except possibly with the permission of the House. To put down this large and complex new clause with the related amendments at this stage, when the preparation of the Bill has been going on for six or seven years, is unsatisfactory. The weather is so bad from a procedural point of view that it is not conceivable for hon. Members to examine every detail of the new clause. Therefore, I shall refer only to one or two points to which my hon. Friend the Minister might like to reply.
My hon. referred to the mandatory conciliation procedures. My recollection of our earlier debate is that there are not to be any mandatory conciliation procedures. Perhaps my hon. Friend will tell us whether that is so.
New clause 1(1) provides:
Where proceedings arising out of the Code are brought against a member of a conference in respect of damage or loss suffered by any person and other members of the conference are also liable (whether jointly or otherwise) in respect of the same damage or loss, the liability of that member to make good that damage or loss shall be in proportion to his responsibility.
If the members of the conference are not liable jointly, I presume that they are liable severally. If that is so, I do not understand why the new clause does not say so. If the members are liable jointly and severally, I do not see why the subsequent parts of the new clause split responsibility up on the basis that my hon. Friend the Minister optimistically mentioned. He said that in subsection (2) we are told how to work out in what proportion the members are responsible. In subsection (2), there is a series of generalities, with no indication as to what weight is to be given in general or in particular. It is not true to say that one can work out from subsection (2) the extent to which any individual member is liable. If that is so, it seems to undermine the purpose of the new clause.
Effectively, the conferences are not to be bodies corporate. That is why there are the provisions for them to be individually liable or proportionately liable. In the light of the new clause, we are giving the members all the advantages of a body corporate in respect of claims against

them in the context that the Minister mentioned, without having any of the responsibilities that such a body would have. That is a worrying development.
As I have said, it is virtually impossible on Report to deal with such matters in detail, as should be done. I hope that those in another place will seek to probe that aspect of the Bill a little more. Generally speaking, My hon. Friend's officials have not done a good job. I hope that my hon. Friend will give them a rocket.

Mr. David Ginsberg: I endorse what the right hon. Member for Worthing (Mr. Higgins) has said about the text of the new clause. It is weighty and complex. I also feel that procedurally what has happened should give the House and Ministers some cause to reflect.
This matter has been with the Department for six or seven years. It could and should have been anticipated. The Committee spent much time smoking out a lot of information from the Government, which should properly have been before the Committee and the House much earlier.
It is impossible this morning to decide whether the wording of the new clause is satisfactory. I accept what the Minister said, that the reasons for tabling it were proper. Therefore, I am prepared to accept it.
9.45 am

Mr. Sproat: I apologise to the House, and particularly to my right hon. Friend the Member for Worthing (Mr. Higgins). I agree that what I am asking the House to do this morning is not the best way to proceed. However, I believe that it is the best way of proceeding that is open to us. It became clear in Committee when not only Government Members studied the wording of the Bill but various interested bodies outside studied it that the protection that we intended to give to members of conferences was not absolutely certain. We thought that it was when we drafted the Bill, but when the General Council of British Shipping and other bodies looked at the Bill they were not satisfied that that was so. My hon. Friend the Member for Eastleigh (Sir D. Price) made some pertinent remarks about that. It was to try to meet what my hon. Friend said that we decided that the best way, although not necessarily a good way, was to proceed as we have done.
I have no doubt that my noble Friends in another place will wish to take the advice of my right hon. Friend the Member for Worthing and look at the matter. All I can do is apologise for the fact the the Ministers did not foresee all the problems. We thought that we had, but the Committee convinced us otherwise. I hope that that general reassurance, and the knowledge that the matter can be considered again in another place, will persuade my right hon. Friend to accept the situation.
I am grateful to the hon. Member for Dewsbury (Mr. Ginsburg) for his remarks. He has got it exactly right. We are proceeding in this way because it is the best that we can do in the circumstances.
When I mentioned international mandatory conciliation I was referring to part two, chapter VI of the Schedule, which refers to the provisions and machinery for the settling of disputes and also international mandatory proceedings. My right hon. Friend said that subsection (2) did not give good guidance, but I believe that that is the most precise guidance that we can give in the circumstances. It provides a basis for all parties to know


how responsibility can be deployed in general, but the precise way in which responsibility should be deployed will depend on the circumstances of the case. We believe that what we have said gives sufficient general guidance.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 2

EXCLUSION OF RESTRICTIVE PRACTICES LAW

'.—(1) No account shall be taken of any restriction to which this section applies for the purposes of the Restrictive Trade Practices Act 1976, and no agreement shall so far as it relates to any such restriction be unenforceable by virtue of any rule of law about unreasonable restraint of trade.

(2) This section applies to restrictions of any of the following descriptions which relate to the trade between states which are Contracting Parties to the Code and are accepted within the framework of a conference, that is to say—
(a) restrictions in respect of the provision of international liner services accepted by the operators of such services under an agreement to which two or more such operators are parties;
(b) restrictions in respect of international liner services accepted by operators of such services or persons for whom such services are provided under an agreement to which one or more such operators and one or more such persons are parties;
(c) restrictions in respect of the supply or acquisition of any service in connection with the operation of international liner services accepted by operators of such services or persons in the business of supplying such a service under an agreement to which one or more such operators and one such supplier are parties.

(3) Where a restriction relates only in part to the matters mentioned in subsection (2), this section applies to the restriction so far as it relates to those matters.

(4) For the purposes of paragraph (a), (b) or (c) of subsection (2) it is immaterial that there are other parties to an agreement in addition to those mentioned in that paragraph, except that paragraph (c) does not apply where the parties to an agreement include more than one such supplier as is mentioned in that paragraph.

(5) If provision with respect to any such service as is mentioned in subsection (2) is made by order under section 11 or 12 of the Restrictive Trade Practices Act 1976 (under which provision may be made as respects the application of the Act to restrictive agreements or information agreements as to services), provision may also be made by order under that section for such consequential modifications of this section as appear to the Secretary of State to be appropriate.

(6) Without prejudice to subsection (5), this section shall, so far as it relates to the Restrictive Trade Practices Act 1976, be construed as one with that Act.'.—[Mr. Sproat.]

Brought up, and read the First time.

Mr. Sproat: I beg to move, That the clause be read a Second time.
Hon. Members will remember that reference was made at earlier stages in the Bill to the interaction of the code's provisions and other domestic competition laws. The new clause is intended to make certain that there will be no conflict between the Bill and such law, in particular the Restrictive Trade Practices Act 1976 and the common law doctrine of restraint of trade. At present an exclusion for certain types of agreement relating to international sea transport services from the Restrictive Trade Practices Act 1976 is contained in paragraph 2 of the schedule to the Restrictive Trade Practices (Services) Order 1976. The paragraph deals with three types of agreement: first, agreements between shipowners, secondly, agreements between shipowners and shippers and thirdly agreements between shipowners and a supplier of ancillary services.
The limits of such excluded agreements are tightly drawn. Agreements are required to be between only certain parties and to contain only certain restrictions. If those limits are exceeded, the whole agreement becomes registrable under the 1976 Act, including restrictions relating to international sea transport services.
Building on the foundation of the present exclusion for agreements relating to international sea transport services, the new clause enables restrictions relating to codist trade, accepted within the framework of a conference, to be separated from the rest of the agreement and to be disregarded for the purposes of the 1976 Act. If the agreement exceeds the limits of the exclusion in paragraph 2 of the 1976 services order to which I referred, it would still be registrable under the 1976 Act, but the codist aspects would not be subject to the sanctions of the Act in that way. Any breach of our international obligations in relation to the code that could be caused by the automatic operation of the 1976 Act is avoided. With the same objective the amendment also excludes the corresponding common law of restraint of trade.

Mr. K. J. Woolmer: I echo what has been said already this morning—that, while we can understand the position in which the Minister found himself, it is unfortunate that matters of such complexity and, in the case of this clause, of considerable substance, should be brought forward at this late stage with such little notice and such little time for the House to consider them.
The new clause was published only on Tuesday. Given its significance, surely we should have had longer to consider this important matter. However, I do not complain that important and necessary changes are made to ensure that the legislation reflects the wishes of the House, but rather that this is part of a procedure which, over the past three years, has started to form a pattern.
The Brussels package was agreed on 15 May 1979 It enabled both this Administration and the previous Administration to agree, however reluctantly, to go along with this proposed legislation. However, to conclude only three or four days before Report that it is important that the relationship to the restrictive practices law should be got right, is unfortunate.
Committee Members will know that the whole question of the relationship between the formalisation and important heightening of the profile of the restrictive practices in international shipping to competition and to the proper interests of the shippers and consumers of shipping services, was very much to the forefront of the Committee's mind. I am sure that the Minister will agree that this is a matter of mutual concern to all hon. Members. With your permission, Mr. Deputy Speaker, I shall reserve my comments on those important matters for new clause 3 so that I do not repeat myself.
Although I enter that strong reservation about the way in which we have been considering the adequacy or otherwise of the restrictive practices law in Britain in relation to this important Bill, I shall not oppose the clause. If, after careful scrutiny, amendments are found necessary in another place it will give us the opportunity to reconsider the matter.

Mr. Higgins: We are entitled to an explanation as to why the new clause appeared suddenly at this stage. We understand the point that the Minister made about the previous clause in relation to proceedings in Committee,


but the relationship of the Bill to the Restrictive Trade Practices Act 1976 and generally to monopolies legislation must have been considered in the greatest detail over many years. We really should have had the clause earlier.
None the less, will the Minister clarify two points? I understood him to say that some of the practices would be registrable with the Registrar of Restrictive Trade Practices despite the clause, though not enforceable. Will he say whether that is so and what practices he has in mind?
Secondly, the Minister said that if a conference went beyond the strict confines of the exclusions from registration and enforceability that are granted by the clause, the full weight of earlier restrictive trade practices legislation would apply. I am not clear what restrictive trade practices he has in mind. Will he give an example, falling within the circumstances that he has described, of a conference practice going beyond the exclusions granted under the new clause which would bring upon it the impact of the existing restrictive trade practices legislation?

Mr. Ginsburg: I rise only briefly to associate myself with the comments that have been made by the hon. Member for Batley and Morley (Mr. Woolmer). It is difficult for the House to form a considered view of new clause 2. If one were minded to be obstructive—and one is not—it would be easy to ask the Minister what discussions he has had with the Law Officers and why a Law Officer is not here to brief hon. Members on the problem.
I content myself with leaving the Minister with two questions, which, if he does not wish to answer now, he might ensure are dealt with in another place. Apart from the problem of the Restrictive Trade Practices Act may I ask whether monopolies legislation applies in such agreements? I am literally thinking aloud. It could be that the exemption that he has given is not sufficiently widely drawn.
I put my next question in general terms, because it can perhaps be discussed later. Although the clause appears to deal with the problem of the British end of the conference, what is the position of a foreign carrier if he finds himself, unlike his British counterpart, in breach of the Restrictive Trade Practices Act 1976?
With those comments, I am prepared to recommend that we accept the clause.

Mr. Michael Shersby: I endorse the remarks of my right hon. Friend the Member for Worthing (Mr. Higgins), and the hon. Members for Batley and Morley (Mr. Woolmer) and Dewsbury (Mr. Ginsburg). This morning we are considering an important new clause of great complexity which hon. Members have had only four days to digest. The House has this week considered not only the Falkland Islands crisis, but many hon. Members, myself included, have spent two nights considering the complexities of the Northern Ireland Bill. Due to our assiduous attention to that measure, it has proved difficult to absorb the mind-boggling complexities of the clause.
As the hon. Member for Batley and Morley pointed out, that is partly due to the procedures of the House. However, I agree with my right hon. Friend the Member for Worthing that it is extraordinary that after years of consideration the House should be given four days' notice

to accept a new clause that has such profound implications. It is not good enough to rely simply on our colleagues in the other place to pick up all the problems that may arise. It is not good enough to hope that they will be dealt with in the other place. Once the Bill leaves this House, our control is greatly diminished, no matter what communications we may have with the other place.
10 am
I greatly regret that it has been necessary to deal with such a complex matter in this way. The Bill's ramifications have been considered, and not only in Committee, for many months. During that time, consultations took place between the Department of Trade and interested parties representing a wide spectrum of interests in the City. During that consultative period we did not have any opportunity to consider such extremely important legal matters. Therefore, it is right to register our protest this morning. After all, we may be considering one of the most extraordinary measures for several years. Hon. Members on both sides of the House have expressed considerable reservations about it. Although I pay great tribute to the way in which my hon. Friend the Minister dealt with these matters in Committee and elsewhere, I am sure that he realises that we are concerned that we are being bounced into nodding through a difficult and complex new clause. Therefore, I share the feelings that have been expressed by other hon. Members. We are entitled to a fuller explanation than we have received.

Mr. Sproat: I shall begin by dealing with a point that was raised with the hon. Member for Batley and Morley (Mr. Woolmer), and which has been referred to by other hon. Members, about the procedure in such matters. I am not so long departed from the Back Benches, or so recently arrived on the Front Bench, as to have forgotten the intense irritation felt by Back Benchers about the suddenness with which a new clause can be presented to the House. I agree that it is unsatisfactory to introduce it at such short notice. It is also unsatisfactory that the House should work by suddenly telling hon. Members that a measure must be debated, perhaps two weeks ahead of time, and that everyone should run round saying that a measure must be brought before the House because it is our only chance.
My right hon. Friend the Member for Worthing (Mr. Higgins) mentioned giving a rocket to officials. I do not intend to pursue that advice in great detail, but I shall discover why it proved necessary to introduce this measure at such a late stage, without more warning. However, the general reason is that Committee stages bring out new points. Rightly or wrongly, the Government thought that the consultations had made matters clear. In Committee, it became obvious that they were not clear. In response to my right hon. Friend's first point, I should point out that if there were restrictions that did not relate to codist trade or international sea transport services, they would be registrable under the 1976 Act. He asked for a specific example of the sort of thing that I had in mind. Under the order, matters are tightly drawn to the precise supply of international sea transport services. If two parties were, for example, to go beyond that and to start placing restrictions on the secretarial services that they should use, or on those who should clean the vessels, and so on, they would be in breach, and would fall foul of the restrictive practices. That is the type of thing that might apply and vitiate the whole agreement.

Mr. Higgins: Would a restriction that said that members of a liner conference should only use a particular port be registrable?

Mr. Sproat: I think not, but I shall check. I think that that would apply directly to the provision of international sea transport services. However, I shall check and let my right hon. Friend know the answer.
The hon. Member for Dewsbury (Mr. Ginsburg) asked whether foreign carriers could be included. If they are members of a conference, the answer is "Yes". I accept the point made by my hon. Friend the Member for Uxbridge (Mr. Shersby). Being fairly new to the job, I am not sure whether all Governments find that they cannot get out of such a situation or whether the Department was at fault in not seeing the problems earlier and letting the House know. However, I understand the strength of his feeling.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 3

SELF POLICING (ARTICLE 5)

'Each Conference shall lodge copies of its list of practices specified in Article 5 of the Code with the Office of the Director General of Fair Trading and any amendments to it and no conference which has not done this shall be entitled to any rights or privileges under this Act or the Code.'—[Mr. Higgins.]

Brought up, and read the First time.

Mr. Higgins: I beg to move, That the clause be read a Second time.
There has been considerable concern about the provisions in the Bill and the corresponding articles in the code that refer to self-policing by conferences. The extent to which self-policing is likely to be effective is open to doubt. The hon. Member for Hackney, Central (Mr. Davis), with whom I used to debate trade matters, has always taken the view that there is more to be said for self-regulation than legislation when it comes to controlling commercial organisations. However, it is important that the self-policing or self-regulation should be effective. One can judge that only if it is conducted in a comparatively open way.
Therefore, I thought it right to table the new clause, because under article 5 of the code—headed "Self-Policing"—the conference will have to
adopt and keep up to date an illustrative list, which shall be as comprehensive as possible, of practices which are regarded as malpractices and/or breaches of the conference agreement".
If we are to conduct such matters in a reasonably open way, there is a case for making the list more generally available. Therefore, I suggest that each conference should lodge copies of the list required under article 5 with the Office of the Director General of Fair Trading and that it should be kept up to date. I suggest that unless that is done no benefit should accrue under the Bill or code.
Since these are likely to be restrictive practices of one sort or another—where there is a public interest in how they are being conducted—there is a strong case for knowing what the situation is, even though such matters relate to the international carriage of goods by sea. Therefore, I hope that I can persuade the Minister to accept the new clause. Perhaps for the first time in the context of shipping and the existing restrictive practices legislation there should be some scrutiny by the Director General and others.
My hon. Friend mentioned in the context of new clause 1 that some practices might be registrable though not enforceable. The lists to which I referred might well come within that category. I hope, therefore, that my right hon. Friend will accept the new clause.

Mr. Woolmer: There is a wider problem here to which the right hon. Member for Worthing (Mr. Higgins) rightly drew attention. But, as I said in Committee, the problem goes beyond article 5 of the code. It also concerns articles 6 and 9. If the matter were put to a vote or if the Minister were searching for the feeling of the House, I should certainly give our support to the new clause but I believe that it is by no means adequate in its coverage and not necessarily the best way of tackling the problem.
Articles 6 and 9 make it clear that not only is there a question of practices that are regarded as malpractices or breaches of the agreement but that conference arrangements and agreements on pooling, berthing, sailing rights, tariffs, regulations and related conditions are also properly matters of public concern.
I do not completely share the view of those who believe that we can endorse private actions in civil courts as the best way of enforcing and reinforcing the public interest. The code and its method of implementation are not satisfactory in the protection of wider interests. After all, the purpose of the Bill is to enable this country to join an international agreement that enables shipping lines to enter into internationally recognised cartels that share out and control certain shipping trade operations.
Although conferences have existed for a long time, there can be no doubt that this is a significant heightening of that system, but:, more importantly, it brings the system within a framework where the intent behind it is consciously and deliberately to enable certain nations to operate shipping lines that would almost certainly not be in operation were it not for the protection afforded by the code. The reason why the Bill causes concern and some unhappiness on both sides of the House is that its purpose inevitably raises worries about the effects that it may have on wider interests.
For that reason, I say today, as I said in Committee, that these proposals will cause increasing anxiety as the code comes into operation. After the first year or two of operation of the code, it will be important to examine with care whether there is a better way of protecting those wider interests. I am happy to support the new clause today because it goes in the right direction. However, the coverage does not satisfy me and the instrument that is chosen in the new clause is not the best way of going about the matter.
10.15 am
Will the Minister assure the House that he will not close his mind to improving the openness and oversight of the operation of the code? That would reassure me, because in Committee he showed himself to be willing to examine points made and to respond to our anxiety. We shall ewer a minefield when the code comes into operation and it would be better for the Minister to consider carefully how the code is operating, not after five years but after one to two years, to see whether the public interest is being properly protected.
Article 52 of the code makes it clear that there will be an international review of the working of the convention after five years. I stressed in Committee that it is important that the Government should lay before the House their


assessment of the working of the code before the international review. It is important that the public and the House should realise that nothing is built into the Bill to ensure either a close scrutiny by outside bodies of the public interest or a review process by Parliament. I am sure that Parliament will wish to have a strengthened review and scrutiny process.
I welcomed the Minister's prompt and unreserved commitment to provide the House with the Government's review in the four to five-year review process. I hope that he will respond to the reservations expressed on both sides of the House and will assure us that, whether or not he accepts this way forward, he will examine during the next two years whether the public interest is being properly protected or whether there is a better way of achieving that than has been suggested so far.

Mr. Shersby: I support the new clause, which is an important and valuable addition to the Bill. I hope that my hon. Friend the Minister can accept it. It is important to remind ourselves and those who study such matters about the nature of conferences, their lack of accountability and their need to be more transparent. We must also remind ourselves of the way in which conferences are viewed internationally. Unless we do so, today's procedure might seem rather obscure to those who study our words and who take an interest in these important matters.
I remind the House of some considerations that I attempted to put forward in Committee that are highly relevant to what we are now considering. On the question of liner conferences and why we are attempting to improve arrangements—the self-policing described by my right hon. Friend the Member for Worthing (Mr. Higgins)—may I quote a passage from Vol. 13 of the "British Shipping Laws" on liner conferences. It states:
Considering the very long history of shipping, conferences are of relatively recent development, originating a hundred years ago. The conference works on the close collaboration of all shipowners who are members of this well-knit private international organisation, which often resorts to pooling and rationalisation of services and, to keep its monopolistic position, works on deferred rebates and dual rates, which are unknown to the tramp world, remaining a special feature of the conference system. Thus a conference, though a non-governmental body comprising private shipping companies, is nevertheless negotiating with shippers as a strong unbending monopoly, and also with sovereign States, assuming a footing of equality. The tramps are in no such position, and in fact no other mode or method of sea transport has been able to work up its way to a position of vantage in relation to the shipper and his State to the same extent as has the conference machinery in the shipping world of today.
That is a good quotation because it sets the debate in context. In Committee, the hon. Member for Batley and Morley (Mr. Woolmer) said:
At the heart of the matter is the legitimisation of liner conferences—price fixing and market sharing in the shipping industry. Those may be necessary or, at least, supportable, but it makes it even more important to maintain proper oversight over their operation. I note the relevant parts of the code, but an outsider looking at the code may wonder who will watch over and assess the wider consumer national and international interest, and how that is to be done."—[Official Report, Second Reading Committee, 28 April 1982, c. 11–12.]
I am therefore pleased that this morning the hon. Member for Batley and Morley has been as good as his word and has supported the new clause.
We are trying to improve the arrangements for self-policing and to ensure that conferences carry out their

obligations under the code because we cannot amend the code itself. That is one of the extraordinary features of the Bill. New clause 3 provides that
no conference … shall be entitled to any rights or privileges
unless it has lodged a copy of its list of practices.
Conferences therefore must be seen to be accountable organisations. British legislation should reflect the highest standards of accountability and professionalism, which has always been part of our commercial standing. This can be achieved only if my hon. Friend feels in his wisdom that he is able to accept the new clause. I hope that he will do so. He is a generous man and, quite apart from his generosity, he has paid close attention to the arguments that have been deployed in Committee and elsewhere. Even if there are difficulties about the wording of the new clause or, to use the time-honoured words of all Ministers, it is deficient in its drafting in some way, I hope that he will nevertheless give an assurance to the House that if he cannot accept it now he will cause it to be accepted in another form in another place. Unless the arrangements for self-policing can be improved there will be the greatest concern outside the House among all those who take a professional interest in these matters.

Mr. Sproat: I am always susceptible to flattery, particularly when it is expressed so eloquently. However, I must say that for once the springs of generosity have run dry. I shall explain my reasons in a moment. I shall deal generally with the important matter raised by my right hon. Friend the Member for Worthing (Mr. Higgins) in the new clause and then I shall deal with some of the specific points which arose out of discussion of the new clause.
Article 5 of the code deals with the elimination of malpractices and/or breaches of the conference agreement which might undermine a conference's basis of operations. Article 5 certainly requires a conference to draw up a comprehensive and illustrative list of practices which might be regarded as malpractices and/or breaches of the conference agreement. But, more important, it requires effective self-policing machinery to be provided. It is that self-policing machinery that will be of greatest value because it gives rise to a number of enforceable rights and duties.
Under paragraph 1(a) of article 5 penalties levied for malpractice might be required to be reasonably commensurate with the seriousness of the offence. Under paragraph 1(b) a review of action or inaction on a complaint may be demanded. Paragraph 1(c) will also enable the Secretary of State to obtain reports on action taken in connection with complaints about malpractices.
The duties imposed by article 5 on the conference and its members and the right of the Secretary of State to require the conference's report on action taken in relation to complaints represents a reasonable balance. The new clause focuses on only one aspect of the problem and does not, in my view, go to the heart of the matter. The heart of the matter is likely to be the way in which complaints are handled.

Mr. Higgins: My hon. Friend says that the heart of the matter is likely to be the way in which complaints are handled. Paragraph 1(b) refers to complaints by persons or bodies unconnected with any of the shipping lines. How are they to know what is in the list if it is not generally available?

Mr. Sproat: They will know if they believe that they have grounds for such complaint because they will


consider themselves hard done by arising out of the agreement that they made with the conference or conferences. There is no understanding on my part that the list will be a secret document. I am simply resisting any suggestion that it be lodged in the way that new clause 3 seeks it to be lodged. Under article 6, "Conference Agreements", the documents are to be published. There is no question here of people trying to keep the malpractices secret.

Mr. Higgins: With great respect to my hon. Friend, article 6 does not state that they are to be published. If that were so, I would be reassured. Article 6 requires that the list, the various provisions and so on
shall be made available on request to the appropriate authorities of the countries whose trade is served by the conference and of the countries whose shipping lines are members of the conference.
It does not say anything about their being made available to countries which are not signatories to the code or the conference, nor does it say anything about their being made available to other people who are not members of the conference and are not members of the Government. If my hon. Friend can give a clear and categoric assurance that all these matters can be published, I shall be considerably reassured. That was what he said, but it is not true.

Mr. Sproat: I admit that I did use the word "published". I was subconsciously reverting to remarks that I made in Committee. I said then that if the Secretary of State were to request the documents there would be no reason why there should not then be put in the Library of the House and made public. I was simply picking up in shorthand form the suggestion that I made in Committee and which I would be happy to carry out.
It is right that we are talking only about documents that relate to the country that is involved in the trade. That is a fair enough restriction under article 6.

Mr. Higgins: I am sorry to keep interrupting my hon. Friend, but on Report there is no other way of getting to the bottom of the matter. It is also difficult for us to ascertain what is going through the Minister's mind if he has not referred to it in his speech. In the light of what he said in Committee, can he give a categoric assurance that the list will be published and will be available so that those who might wish to make complaints will be able to do so?

Mr. Sproat: At this moment, I can see no objection to these matters being put in the House of Commons Library. I shall check and find out the precise legal position, and will then let my right hon. Friend know. My intention is that nothing should be kept secret that is not commercially confidential. That would be the only restriction relating to this matter.

Mr. Higgins: Much of this is likely to be commercially confidential in the sense that those who want to make complaints will want information while those who are making the agreements will prefer the information not to be known. If that is what is meant by "commercially confidential", it is a somewhat doubtful restriction. I am grateful to my hon. Friend for his assurance, but he should have thought this through beforehand.

Mr. Woolmer: Did the Minister's slip of the tongue reveal his aspirations? As he has said, under article 5 the appropriate authorities can get information. Article 6 provides that the information
shall be made available … to the appropriate authorities".
Article 9 provides that the information
shall be made available … at reasonable cost".
Will the hon. Gentleman ensure that all the information that will be available under articles 5, 6, and 9 will be made publicly available by the Government, either by tabling it in the Library or by publishing more widely? If he can give that assurance, he will go a long way to enabling others to do some policing, even if there is no formal machinery.

Mr. Sproat: I cannot give that specific assurance. The hon. Member for Batley and Morley (Mr. Woolmer) referred to my slip of the tongue, but I should like to think that it was a true definition of the way in which these procedures should work. However, it showed my intention to be as open as possible. I cannot go any further in defining what "as open as possible" means because we have not started to operate the code. The precise ways in which it will operate the precise details which will be commercially confidential have yet to arise in practice, but it is my intention that as much information as possible should be made widely available. Clearly that cannot contravene commercial confidentially and the precise limits of what car, be laid in the Library will have to be decided by the Secretary of State of the day in the light of practice.
It is my intention that if the Secretary of State calls for reports under article 5, or for a conference agreement under article 6, the relevant information should be made available on request to the extent that he feels proper. This matter can be left to his judgment in the light of the way in which the conference works in practice.
The hon. Member rightly said that he raised these issues in Committee. He is much more worried about policing than the Government are. We believe that the less bureaucratic we can make the procedure the better. The more that we can rely on self-policing the better we shall like it. We are not inclined to introduce any further elements of bureaucracy into the Bill. That is why I cannot be as generous as my hon. Friend the Member for Uxbridge (Mr. Shersby) would like and why I cannot accept the new clause.
The hon. Member for Batley and Morley and my hon. Friend the Member for Uxbridge talked rightly about the need for conferences to be transparent. I hope that they will agree that the new transparency that is provided for in articles 5 and 6 is an advance. I know that there are some who dislike the conference system, but I hope that they will agree that there has been an advance. There will have to be much more openness and discipline in effecting policing.

Mr. Woolmer: Does the Minister recognise that the Bill will create private bureaucracies? If they were to be Government bureaucracies the public would expect the Government to be publicly accountable in the House for the way in which they conducted their side of the bureaucratic cartel arrangements. This is not a question whether the House should seek to create a bureaucracy to


supervise a procedure. A bureaucracy is being created and the question is whether it will be supervised adequately in the public interest.

Mr. Sproat: The hon. Gentleman must distinguish between the bureaucracy created between shipping organisations, shippers and other organisations and the necessity for them to consult and recognise international mandatory conciliation procedures. That is one form of bureaucracy that arises from the Bill. It arose originally from the UNCTAD liner conference code. On the other hand, there is an absence of Government bureaucracy. I do not want to set up a Government bureaucracy. I accept that we are going a short distance down that road. Article 5 provides that the appropriate authorities—in this instance the Secretary of State—will have the right to make inquiries into the results of an inquiry into a malpractice. That is one piece of bureaucracy and I do not wish to go further than that.
I have given the House the assurance that, within the limits of commercial confidentiality and within the limits which experience teaches us to be appropriate, I shall seek to make as open as I can the results of any inquiry into the workings of the liner code in practice. Self-policing is one bulwark against malpractice. Secondly, the Secretary of State will see reports of any inquires into malpractice. The third bulwark is that there will be an international review after five years. Preparations will have to be made for that review after four years. We are not talking about a very long time scale. If the review shows that there is a better way of conducting these procedures, we shall be open-minded about accepting it.
The hon. Member for Batley and Morley asked me to give an assurance that the Government would not close their mind to ways of making examinations more open before the five years have passed. I give him the assurance that it is my intention to operate the code as required by the Bill and to monitor it. Our doors will always be open to the General Council of British Shipping, to the shippers and to the commodity organisations. If they say "This is not working and we want you to improve it before the United Nations five-year review takes place", we shall, of course, try to do so.
My mind is open to ways of improving these procedures that might be open multilaterally to this Government and to suggesting to the conference ways in which self-policing could be improved. I reiterate the undertaking that I gave in Committee that the Government will lay their views before the House of Commons on the way in which the conference has been working in time for the House to make whatever input it thinks best to the Government's views which will be put before the conference.

Mr. Ginsburg: The Minister has said that he has an open mind. Although we wish him well personally, he will not be in his present office for ever. Will he consider imposing an obligation on the Government to report in another place along the lines that he has suggested? I leave that thought with him.

Mr. Sproat: That is an interesting thought. I hope that I shall not be in my present office for ever—

Mr. Clinton Davis: So do I.

Mr. Sproat: The hon. Gentleman must have spent what seemed to him an eternity in the job that is now mine. I am sure that he knows how I feel about these matters.
I cannot give the hon. Member for Dewsbury (Mr. Ginsburg) the precise assurance that he seeks. However, if, in the other place, a suitable way of tabling an amendment was found, I dare say that the Government would look at it in a friendly and sympathetic light.

Mr. Higgins: My hon. Friend seems to be going back on what he was saying earlier, which was reasonable and satisfactory. He said then that he would look carefully at ways in which the information in the lists could be made available to those who might wish to make a complaint, either on the request of the Government, payment of a suitable fee, or whatever. I hope that my hon. Friend is not going back on that—not in the context of the five-year review or before the five-year review, but before the Bill goes through—because, on the basis of good faith, I should be prepared to accept what he has said.

Mr. Sproat: I did not intend to say that I would do it before the Bill reached the other place. What I do say is that I am prepared to examine ways in which the Government, or whoever happens to be in my job, can examine these matters as experience tells us how the Bill is operating. I am sorry if I have misled my right hon. Friend.
I cannot go any further today than I have done, first, because of the constraints of commercial confidentiality, and, secondly, because of the common sense constraint that we must see how the Bill will operate. When I see how the Bill is operating, I shall look, in the most open-minded way, at how we can make most widely available such information as does not contraven common sense or commercial confidentiality. However, I do not expect to arrive at any conclusions before the Bill goes to another place, because the liner conference will not have come into practice.

Mr. Higgins: I apologise for intervening again, because of the restraints under which we are placed. With regard to commercial confidentiality, one understands that in a narrow sense it might be necessary to impose restraints, but in the broader sense, to which I have referred, they would be unjustifiable. Be that as it may, all that we are asking of my hon. Friend is that, when the Bill gets to the other place and his Department and my noble Friend the Secretary of State have had a chance of examining the matter, they will comment on the point raised in the debate.
That has nothing to do with how the Bill works in practice, or with seeing how it goes. We do not have to know how it works in practice. If people want to make complaints—and they are entitled to make complaints—they should be able to apply for the information that it is necessary for them to have to know whether they have a complaint. It should be made available on request.
I see no earthly reason why my hon. Friend cannot say that my noble Friend will make a statement in the House of Lords on that point when the Bill reaches the other place. That is what I understood him to be saying clearly a few moments ago. I hope that he will not go back on it.

Mr. Sproat: I shall not go back on that. I shall lay the onerous obligation of looking at this matter on my noble


Friend. I thought that my right hon. Friend was now asking that conclusions should be defined in the other place. We shall certainly comment on this important point when the Bill goes there.
My hon. Friend the Member for Uxbridge listed, succinctly and fairly enough, some of his well-known objections to liner conferences as a whole. Fortunately or unfortunately, that is not the matter that we are discussing in the Bill, although it arises out of the Bill. All that we are discussing is the code and how it could be modified and applied through British law. My hon. Friend may think that liner conferences are not acceptable. However, the Bill, particularly in articles 5 and 6 of the code, makes them less objectionable in so far as it imposes more obligations on the conference.
With those few words, I must advise my right hon. Friend that I cannot accept the new clause, and I hope that he will withdraw it.

Question put and negatived.

Clause 3

MATTERS WHICH MAY BE PROVIDED FOR BY REGULATIONS

Mr. Sproat: I beg to move amendment No. 1, in page 3, line 6, leave out from 'contract' to end of line 12 and insert:
and where a term is so implied—
(a) any agreed terms which are to any extent inconsistent with that term shall to that extent be of no effect; and
(b) without prejudice to paragraph (a), any agreed provision for the settlement of disputes arising out of the contract shall apply to disputes arising out of that term only if—
(i) the parties to the contract have expressly agreed that that provision shall apply to such disputes; or
(ii) the parties to the dispute in question agree that it should apply to that dispute.".
The amemdment gives effect to the undertaking that I gave in Committee that I would meet the point raised by my hon. Friend the Member for Eastleigh (Sir D. Price) that arbitration clauses should not apply to disputes about terms implied in contracts unless the parties expressly agreed. The amendment replaces part of subsection (5) of clause 3. The subsection remains as agreed in Committee up to and including the end of paragraph (a) of the amendment.
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However, subsection (b) now makes it clear that where regulations imply a term that is a mandatory provision of the code into an agreement, any arbitration clause—or similar clause for the settlement of disputes that governs the agreement—does not apply to dispute under implied terms unless the parties have expressly agreed either that such an arbitration clause is to apply to such disputes or, after a dispute has arisen, the parties agree that the clause should apply to the dispute in question.
There is now no question of regulations requiring that an arbitration clause should apply to implied terms. It is for the parties to decide.
This was the clear view of my hon. Friend the Member for Eastleigh. It was the clear view of the General Council of British Shipping, and I am happy to have tabled this amendment, which is I hope is all that they require.
Amendment agreed to.

Mr. Higgins: I beg to move amendment No. 2, in page 3, line 31, leave out from 'State' to end of line 33 and insert

'for the purposes of Article 11 (consultation machinery) to add to or delete persons or organisations specified in Schedule (Persons or Organisations to be consulted under Article 11, Paragraph 1 of the Code) to this Act.'

Mr. Deputy Speaker: With this amendment it will be convenient to take the new schedule—
'Persons or Organisations to be consulted under Article 11 Paragraph 1 of the Code.
(1) The British Federation of Commodity Associations.'..

Mr. Higgins: In Committee, the view was expressed that the extent to which certain important matters were to be defined by regulation rather than be specified in the Bill was unsatisfactory. There were two main areas where we thought that the Government ought by now to have been able to make up their mind. One was the question of the definition of the national line, which is the subject of a later amendment on the Order Paper, and the other is this amendment, which is related to the definition of what is a shippers' organisation.
If we refer to the Bill we find that it is possible for the Government to carry out consultations with particular bodies and they will set out what the conditions are for qualifications as a shippers' organisation. That is to say, an organisation of those who are seeking to have their goods, or the goods of their clients, carried by a particular conference line. None the less, as I understand it, but perhaps the Minister can clarify the point, the exact set of decisions that are to be used to define a shippers' organisation have not yet been agreed or defined by the Government.
As a result, there are certain organisations that feel that they are likely to be left out of any continuing consultation process under the code. That is obviously a matter of some cause for concern Therefore, I have sought in my amendment to delete the provisions that stand at the moment for imposing the conditions that would define a shipping organisation, and to adopt a technique that was used in the Companies Acts, that is, actually to specify what the organisations are, in the same way, for example, that in companies' legislation, certain accountancy bodies are specified in a separate part of the Bill. I know now that that is something of a controversy in another part of my hon. Friend's Department, so I shall not stray into those areas. I merely point out that the technique that I am using has an honourable and effective precedent. That being so, in the schedule I have specified only one organisation that is concerned with commodities. It is important that it should be included in the list. The amendment gives the Minister power to add as may shippers' organisations as he wishes. The General Council of British Shipping, for instance, may wish to be included. My amendment does not inhibit my hon. Friend from adding to the list. I have not had time to consult other organisations so I thought it improper to include them.
One could specify recognised shippers' organisations for consultation purposes. The Minister may say that that will result in a clumsy or lengthy list, but the consultations will be important. Most of them will be with trade organisations rather than with individual companies and it is, therefore, important that everyone should know whether they are entitled to be consulted under the code.
Whatever happens, our legislation can affect only the United Kingdom position. Unfortunately, or perhaps fortunately, we cannot ensure that other Governments consult shippers' organisations in Britain, even when they


are engaged in trade with other countries. We should clarify the United Kingdom position and that is what I seek to do.
Whether or not my hon. Friend is able to accept the amendment and new schedule, perhaps he can give an assurance that the British Federation of Commodity Associations will be among those organisations entitled to be consulted and that it will be consulted both in advance of the code coming into operation and on the terms of the code. That would be helpful. I understand that some wider organisations, such as the General Council British Shipping, do not believe that they are qualified to represent some of the more specific organisations that have an interest as shippers and will be radically affected by the code.

Mr. Shersby: I support the amendment moved by my right hon. Friend the Member for Worthing (Mr. Higgins). Instead of leaving consultation arrangements to be designated in regulations by the Secretary of State under clause 3, my right hon. Friend proposes to make a start by designating them now in a schedule. The name of one important organisation that should be consulted is included. That organisation's cargoes are carried by liner conferences world-wide. The Secretary of State is left free to add other organisations and persons to the list.
I hope that if the Minister accepts the amendment he will cause additions to be tabled to the schedule in another place, so that everyone knows what is intended, instead of leaving the important matter of consultation to be dealt with by subsequent regulations. The amendment makes a marked improvement to the Bill. Organisations outside the House which have a tremendous interest in these matters, will be reassured if they are included in the list. The Minister has been deeply involved with such organisations in the past few months and valuable consultations have taken place.
The events of the past few months have done a great deal to improve relations between his Department and the associations. Both his Department and the associations now understand each other's views better. Some of the justifiable complaints to the effect that people have not been consulted have been settled as a result. The amendment is important if for no other reason than that it demonstrates to all those concerned that the legislation is intended to enshrine proper consultation processes. The schedule is not complete. I should like it to be completed by amendments in another place. I hope that the Minister will accept the amendment in the spirit in which it is moved, as a genuine attempt to improve the consultation arrangements provided for in the Bill.

Mr. Sproat: Before I deal with the precise amendments I must tell my hon. Friend the Member for Uxbridge (Mr. Shersby) how glad I was to hear that he felt that there is a better understanding between the commodity associations and the Department of Trade. That will be a great benefit, whatever other benefits arise. I hope that we can continue to build on that good relationship and, at another time, I should be interested to discuss with my hon. Friend how we can find practical ways of building, consolidating and maintaining that good relationship.
A shippers' organisation is defined in chapter I of the code as a

body which promotes, represents and protects the interests of shippers".
The code leaves it open to national authorities to recognise shippers' organisations and permits them to specify conditions for such recognition.
The Department will, of course, be consulting interested parties on what the conditions should be. The conditions themselves will be specified in regulations made under clause 2(1). Interested parties will wish to consider a number of important matters. Shippers' organisations necessarily will incur the major responsibility for carrying out consultation and conciliation procedures on behalf of shippers. Such organisations may be under an implied duty to their members to carry out such consultations properly.
The willingness of a body to be recognised is an important factor. We wish to avoid undue proliferation of bodies to be recognised as shippers' organisations, but we see a role for the smaller specialist or regional shippers' organisation in addition, of course, to the British Shippers Council. One possible criterion for recognition as a shippers' organisation might be that the body represents shippers that carry a certain percentage, for example, of conference trade on a particular route.
Given the further consultations required in this complex area, I do not think that it would be right at this stage to single out any one organisation for recognition, but I can, of course, give the assurance for which my right hon. Friend the Member for Worthing asked. In drawing up the regulations, the British Federation of Commodity Associations, like all other interested parties, will be properly consulted. Therefore, although I cannot accept the amendment, I hope that my right hon. Friend will accept that I accept the spirit of what he is proposing—that the commodity associations should be properly consulted. They will be properly consulted. What they say in the consultations will be fully taken into account in the regulations that we shall later draft.

Mr. Higgins: In view of that assurance that the commodity associations will be properly consulted in relation to the code as a whole, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5

PROCEEDINGS BY OR AGAINST UNINCORPORATED CONFERENCES

Amendments made: No. 3, in page 4, line 11, after 'by', insert 'reference to'.
No. 4, in page 4, line 20, leave out 'the provisions of section 9' and insert
section (Liability of members of conference to be in proportion to their responsibility) (5)'.
No. 5, in page 4, line 25, leave out subsection (5).—[Mr. Sproat.]

Clause 8

RECOGNITION AND ENFORCEMENT OF RECOMMENDATIONS, ETC. OF CONCILIATORS

Amendment made: No. 6, in page 7, line 12, after 'judgment', insert 'or decree'.

Clause 9

ENFORCEMENT OF JUDGMENTS ETC. AGAINST CONFERENCE MEMBERS

Amendment made: No. 7, in page 7, line 22, leave out Clause 9.—[Mr. Sproat.]

Clause 12

REGULATIONS AND ORDERS: CONSULTATION AND PARLIAMENTARY CONTROL

Mr. Sproat: I beg to move amendment No. 8, in page 9, leave out lines 19 to 25 and insert—


'(2) The following shall be subject to affirmative resolution—
(a) regulations under section 2(1) made before the expiry of the period of three months beginning with the date on which this Act comes into force;
(b) any Order in Council under section 11.
(3) The following shall be subject to negative resolution—

(a) regulations under section 2(1) made after the expiry of the period mentioned in subsection (2)(a);
(b) any regulations under section 4.
(4) In subsection (2) "subject to affirmative resolution" means that the instrument in question shall not be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament; and in subsection (3) "subject to negative resolution" means that the instrument in question shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.

Mr. Deputy Speaker: With this we shall discuss amendment (a) to the proposed amendment, in line 1, at end insert—
'(a) any regulation, whenever made defining a national shipping line'.

Mr. Sproat: The amendment seeks to meet some of the concerns properly and understandably expressed by hon. Members in Committee to the effect that clause 12 provides insufficient opportunity for the House to scrutinise regulations. As I explained then, I have sympathy with those views, but I made it clear that a balance had to be struck between scrutinising important issues and avoiding affirmative procedures for issues of lesser significance and, in some cases, of minor significance. The amendment seeks to strike a balance between those two factors. The change introduced by the amendment is that regulations made under section 2(1) within three months of the Act coming into force shall be subject to affirmative resolution. That is an important change, as previously the regulations were not so subject.
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Three important factors have led to the amendment. First, as provided by clause 14(2) the Bill will be enacted on a day to be appointed by the Secretary of State. Secondly, clause 2(1) empowers the Secretary of State to make regulations that will give effect in the United Kingdom to the key provisions of the code. Thirdly, the Secretary of State is required by clause 12(1) to consult such persons as he considers will be affected before making any regulation under clause 2(1). We shall ensure that the programme of consultations is carried through in good time so that the main regulations that we intend to make under clause 2(1) are laid within three months of the

Bill being enacted, and are subject to affirmative resolution. I hope that represents a satisfactory assurance that the issues of major importance to be covered by the regulations will be subject to adequate scrutiny by the House.

Mr. Higgins: We have said some fairly harsh things about the Government's position on the Bill and I am glad to have the opportunity to welcome the amendment tabled by my hon. Friend the Under-Secretary of State.
We felt that it would have been better if some of the important points to be covered by regulation had been dealt with in the Bill. One of the points that has given rise to considerable controversy was the definition of a national line. We were worried that, despite all the consultations that have taken place, it was possible that the definition of a national line eventually arrived at might not be satisfactory to some of the other interests involved.
If the matter were to proceed by negative resolution we might find that the House had no opportunity to debate it. Many regulations subject to negative resolution never come forward for debate, whereas those subject to affirmative resolution necessarily do so, albeit for only one and a half hours, and can be voted upon.
The Minister seems to have met our point. I understand why the qualificaticn is made of a three-month time limit. I was unfortunately distracted for a moment during the Minister's speech, so can he confirm that the point covered by my amendment (a) is covered by his amendment? If the controversy taking place about a national line were not resolved within three months of the Bill being enacted, would the definition of a national line be subject to the negative resolution rather than an affirmative resolution? I do not suggest that there is any Machiavellian intention on the Minister's part, but if the definition arrived at was not liked by outside bodies there might be a case for making it subject to negative rather than affirmative resolution. Is my amendment necessary to cover the possibility that the national line will not be defined within three months?

Mr. Sproat: It is technically possible that we would not have reached agreement about national shipping lines before we put forward the regulations. It is my firm intention that we shall come to such an agreement before we make any regulations and that that would be included in the first batch of regulations and would therefore be subject to the three-months procedure that is mentioned in my amendment. That is 99·9 per cent. certain. I assure my right hon. Friend the Member for Worthing (Mr. Higgins) that if by any fluke the matter were not to come within the three-months procedure I should certainly ensure that it was debated in the House under other procedures.

Mr. Higgins: I am grateful for that undertaking. We all look forward to the Minister's promotion at some stage. He will not be in his present position for ever. It is not entirely clear that what he has said will wholly bind the Government. I am not clear why he cannot accept my amendment, which seems to be impeccably drafted and makes the position clear beyond peradventure.

Mr. Shersby: The purpose of Government amendment No. 8 is to provide that any regulation made under clause 2(1) shall be subject to affirmative resolution within three months of the enactment of the Bill. It may take some time to obtain a satisfactory definition of a shipping line. That


is an important issue and the purpose of the amendment of my right hon. Friend the Member for Worthing (Mr. Higgins) is clear. It would ensure that the definition of a shipping line in secondary legislation was always subject to affirmative resolution. The Minister said that he clearly understood the feelings of the Committee on that point. I hope that he will accept my right hon. Friend's amendment. It would be a valuable addition to the clause.

Mr. Woolmer: The amendment deals with procedures in the House. I welcome the Minister's willingness to respond to the Committee's feeling. It would be wrong not to thank him for that response. However, there is always a "but", and I must agree with his right hon. and hon. Friends who drew attention to national shipping lines.
In Committee I drew the Minister's attention to the importance of the meaning of United Kingdom flight registration and national shipping lines to the trade unions. I asked him whether they were participating in the present consultations. We were surprised, pleasantly or otherwise, on the day of the last sitting to read a letter in the Financial Times from an outside source that assured us that there was virtual agreement on everything except the issue of national shipping lines. We were encouraged to feel that the Minister was almost at the end of a long tunnel. When the Minister responded to me, he stated:
The unions are also being consulted about this, and they will also be consulted about the regulations."—[Official Report, Standing Committee E, 13 May 1982; c. 68.]
Hon. Members may remember that, as it turned out, the regulations were virtually already agreed. My understanding is—I may be doing an injustice to someone—that the unions have not been consulted at all about the matter. They were certainly not party to the current consultations. The Minister cannot know in detail everything that is happening, but will he see whether the consultations on the national shipping line issue are going ahead with the trade unions?
Let me explain why I give particular attention to the national shipping line issue. People tend to think that a United Kingdom ship is a United Kingdom ship. In the code it is sensibly envisaged that a United Kingdom ship may be built outside the United Kingdom, the shipping line effectively owned outside the United Kingdom and the ship simply registered in the United Kingdom for convenience. Alternatively, a ship could be registered in Liberia but owned and controlled by the United Kingdom interests. The connections between where a ship is registered, who owns it and effectively derives the benefit from the line, who is employed on the line and who manages it may differ.
The latest estimates that I have show that between 40 and 50 per cent. of all United Kingdom registered shipping tonnage is beneficially owned by non-United Kingdom companies. A member of the public may not realise what is actually meant by a United Kingdom shipping line. He may not realise that that can happen. We should consider whether our national shipping lines are deriving benefit on our behalf under the code.
Over half of the United Kingdom beneficially owned shipping tonnage is owned by only six companies. I am sure that that fact is not generally appreciated either.
On the back page of The Guardian yesterday reference was made to two container ships flying under the British

flag that found it convenient to continue trading with Argentina by transferring to a Liberian flag only days after the Falkland Islands hostilities had begun.
Let me explain why, among his many other arduous duties, the Minister faces the problem of defining a national shipping line and why I support the amendment of the right hon. Member for Worthing (Mr. Higgins) to ensure that not only the initial definition of a national shipping line, but subsequent changes, should be specifically subject to affirmative resolution.
11.15 am
The "Pacific Charger" was stranded on its maiden voyage in May last .year. It was built in Japan. Its registered owners were Ocean Chargers Co. Ltd. of Monrovia, Liberia which was a wholly owned subsidiary of Kansai Steamship Co. Ltd. of Japan, which apparently had been incorporated in Liberia solely for the purpose of owning the ship. The ship was chartered by Ocean Chargers to Kansai for five years. Ocean Chargers was to place her at the disposal of the charterer with a full crew and to meet full crew costs. Operation of the ship was entrusted by Kansai to an offshoot of OCL, Crusader Swire Container Service Ltd. of London, with the documents being signed by agents from Japan.
There was a further agreement under which Ocean Chargers appointed another company to be the ship's manager—Harmony Maritime Co. Inc., which had the responsibility of carrying out the function of Ocean Chargers and being obliged to perform under the time charter. Harmony Maritime apparently sublet the job of recruiting the officers and crew. The officers were engaged by Union Maritime Company Inc. and the ratings were engaged by Ocean Services Corporation Ltd. of Hong Kong. Harmony also used a totally different Japanese company as its general agent in Japan.
When the matter came before the New Zealand court, it noted that Harmony Maritime's registered office was in Panama, that its main office was elsewhere and that it had yet another office in Tokyo. The second office was shared with one of the web of companies that I have mentioned.
People expert in the shipping world will not be surprised by the complicated web of different national interests, national registrations and different people doing different things subject to different countries' laws. People who work in the industry—certainly the trade unions—are anxious about the way in which the web works not in their interests.
I hope that when the Minister brings forward his definition of a national shipping line he will have reappraised the way in which flags of convenience are working. They cannot be wished away. Nor do I believe that some degree of internationalisation of shipping ownership and management and shipbuilding will not occur. But the web—often of deceit and frequently to the detriment of safety and other conditions of people working on ships—partly explains why I support the amendment that provides that the definition of national shipping line should be specifically brought forward for affirmative resolution.
I hope that the Minister will ensure that the trade unions are carefully and fully consulted in working out a definition of a national shipping line. That has not happened so far.

Mr. Sproat: I shall look into the allegation—if that is not too strong a word—that the hon. Member for Batley


and Morley (Mr. Woolmer) makes about consultations with the trade unions on definitions of national shipping lines. I understood that they were consulted. It is my intention that they should be. It would be improper if they were not given a full opportunity, equal with every other interested party, to make their views known. I shall write to the hon. Gentleman, with copies to anyone else who may be interested.
The hon. Gentleman quoted an interesting and intricate web, to use his word, to show how international and national companies, however defined, get mixed up in the business of international shipping. It illustrated the complexity of the matter.

Mr. Woolmer: It was the intention.

Mr. Sproat: I am very grateful to the hon. Gentleman for giving an excellent example of the problems that make these consultations so lengthy. He underlined both the difficulty and importance of having a satisfactory definition of a national shipping line.
Perhaps I can go even further than I did earlier. With my well-known interest in being as accurate and as fair as possible, I said that it was 99·9 per cent. certain that a definition of a national shipping line would be decided before we came to the House again. I now give a 100 per cent. guarantee that we shall get that definition before we bring any other regulations to the House. I give an unequivocal guarantee that we shall discuss the matter and that it will be subject to the affirmative resolution procedure. Assuming that I shall be a few more weeks in my present job, I hope that my right hon. Friend will accept my assurance and accordingly withdraw his amendment.

Mr. Deputy Speaker (Mr. Ernest Armstrong): There is no need to withdraw the amendment if the right hon. Gentleman is not pressing it.

Mr. Higgins: It is my amendment, so I think that I am entitled to say a word about it.
The late lain Macleod had an expression for how one should respond to the kind of assurance that I have just been given. He said that one ought not to shoot Santa Claus by then voting. That is a rather unseasonable way of putting it. My hon. Friend's assurance has been absolute and complete, and I am therefore happy not to press the amendment to the amendment.

Amendment agreed to.

Clause 13

INTERPRETATION

Amendment made: No. 9, in page 9, line 35, at end insert
judgment", in relation to proceedings arising out of the Code, means any judgment, decree, order, award, recommendation or determination of any description given or made in such proceedings, and references to the giving of a judgment shall be construed accordingly;'—[Mr. Sproat.]

Mr. Sproat: I beg to move, That the Bill be now read the Third time.
As the House will know by this stage in our proceedings, this Bill is an enabling measure. It will empower the Secretary of State to make regulations to create the necessary rights and duties in domestic law to enable the United Kingdom to implement the United

Nations convention on a code of conduct for liner conferences. Our accession to the convention will be subject to the significant reservations that are already established in Community law and are embodied in Community Regulation No. 954/79. The code convention and the Community regulation need to be read together. Many of the code's provisions concern the relationship between shippers and shipowners and these have been generally welcomed. However, the United Kingdom and a number of other countries found other provisions of the code objectionable, and that was why the United Kingdom voted against the code when it was first drawn up. In particular both the Government and the British shipping industry concluded that British interests would be damaged if the code's cargo-sharing provisions were adopted without modification.
The most serious problem facing British shipping was that a number of continental European countries had signed the code convention, and there was the clear prospect that the code might eventually apply generally on the Continent, Imposing serious restrictions on our shipping lines' trading opportunities, and thus job opportunities, in the cross-trades to and from European ports. We faced this possibility whether or not we ourselves acceded to the United Nations code, by virtue of the Continental countries' intention to do so.
It was the development of the Community policy on the code convention that was the key to reconciling the code with British national interests. The principal effect of the policy will be to ensure that the code's cargo-sharing provisions will protect the shipping of only those countries, mainly developing countries, that wish to undertake cargo-sharing.
Most member States now have legislation corresponding to this Bill before their national Parliaments. Some will be ready to accede to the code by the end of this year, most will be able to accede by early 1983. All are obliged to make the agreed reservations when they accede.
The Bill does not provide for the code to have the force of law in the United Kingdom; the drafting of the code makes it unsuitable for such treatment. The code contains a mixture of mandatory provisions, usually where the word "shall" is used, and recommendatory provisions, usually containing the word "should". Even apparently mandatory provisions sometimes contain so many qualifications as to make them impossible to be regarded as mandatory.
The Department's consultative document published in August 1980 set out in some detail those code provisions that we intend by regulations to identify as mandatory and also those that we shall clarify. I am in no doubt that it was right to leave these matters to subordinate legislation. These questions are extremely complex and interested parties, whom the Secretary of State will be obliged to consult before making Regulations, will wish to consider these issues again in great detail. As I have explained, our intention is to carry out these consultations in good time so that the main regulations that we shall make under section 2(1) are laid within three months of the day on which the Act comes into force and are therefore subject to affirmative resolution. I would envisage regulations being made in the latter part of this year so that we can stay in step with those of our European Community partners who are also pressing ahead with their own legislation.
Certainly, it remains important to us to be able to accede to the code by the time the code comes into effect, which seems likely to be some time in the first half of 1983.
It is to be hoped that when the code becomes operative it will bring to an end a protracted source of uncertainty in the world of liner shipping, and on terms which, while no one could pretend they were designed expressly to advance British interests, give us reasons for some satisfaction that we have been able to avert serious threats that were apprehended by our industry at an earlier stage. Moreover, in a world where countries are divided in their views on the wisdom of protecting their shipping industries, and have the ability to do so, whether or not their trading partners agree, an internationally agreed code, laying down an internationally agreed trading regime, is less likely to lead to international friction than a variety of conflicting unilateral national protectionist measures, even when it cannot give every country, or perhaps even any country, 100 per cent. of what it would like.
Having made those few comprehensive remarks which spring out of what we have been discussing over the past weeks, it is perhaps appropriate for me to say two sentences—and I mean two sentences—about the role of our merchant fleet in the Falklands. It has for centuries been the role of the Merchant Service to support the Royal Navy in times of crisis. There is a long and distinguished record of that support, and we are now seeing in the Falklands a further dramatic example of the skilful and brave way in which the Merchant Service fulfils that historic role. I am sure that the whole House welcomes this opportunity to pay that tribute.
I commend the Bill to the House.

Mr. Woolmer: Before I turn to this important Bill on international shipping trade agreements, on the day when the QE2 has returned to our shores and when the Minister has made a most welcome statement on the role of the Merchant Navy in the Falkland Islands, I should like on behalf of the Opposition to pay a sincere and deep tribute to the services of the Merchant Navy and to the merchant seamen in the South Atlantic. I paid tribute to the merchant fleet and the seamen on 28 April, when the Bill was in Committee. I said then that the difficult operations in the South Atlantic underline the extreme importance of having a strong merchant shipping fleet. Since I first praised the bravery and dedication to service of our merchant seamen, events have surely strengthened the justice of that praise and assessment.
A large number of merchant vessels have been involved in the South Atlantic. The exact number of merchant seamen who are involved is not known, but it must be between 3,000 and 4,000. It is often forgotten that civilian merchant seamen crew the Royal fleet auxiliary ships, and it was with a special and deep concern that we heard the news a few days ago, on which we await further information, of the attacks on Tuesday on the "Sir Galahad" and the "Sir Tristram". Our sympathy and understanding go out to those who have been bereaved of loved ones in the most recent action and in the attack on the "Atlantic Conveyor". On behalf of the Opposition, I associate myself wholeheartedly with the views expressed by the Minister.
This Bill, when passed, will enable the United Kingdom to join in an international agreement on the sharing out of shipping services in an arbitrary andunsatisfactory manner. Most hon. Members go along with the measure with considerable reluctance. They do so only because it is better to be part of an agreement between nations rather than to be left out in the cold and also because of the vital and significant derogation from the main code of the agreement that will permit the continued competitive and free access of our shipping to 75 per cent. of world sea-borne trade. That important qualification and reservation was the result of an EEC agreement promoted largely on the insistence of the Labour Government. Because of that, the Opposition do not oppose the Bill today.
There remain four essential conditions over which we shall maintain a close watch to ensure the acceptability of the agreement in practice. First, the operation of the agreement must leave open the door to competition from non-conference lines. Secondly, it must not be taken as a signal to extend international and State cartel market-sharing in shipping beyond the liner shipping trade. Thirdly, it must not lead to high-cost inefficiency behind a wall of protection with consequential damaging effects on customers of shipping and ultimately upon consumers and workers. Fourthly, there must be the maximum openness and, in my view, Government supervision to ensure that the public interest is seen to be protected.
This ranks as a unique Bill in my short experience of the House. I hope that we rarely see the like of it again. With those reservations and important qualifications in respect of the period ahead, we do not oppose the Bill but share the concern to ensure that the interests of British shipping, of those who use British shipping and of the workers employed by British shipping are paramount. We shall stand with the Government in making sure that the Bill, when implemented through the code, does not contravene those interests.

Mr. Higgins: I join the Front Benches in paying tribute to the magnificent work done by the Merchant Navy and its members in the Falklands conflict. All hon. Members are profoundly impressed by the skill and courage that they have shown. Those of us who have been at sea in difficult and dangerous conditions appreciate their tremendously difficult task. I also echo the points made to the effect that it is vitally important that we have a strong and adequate Merchant Marine. This has been brought out by the Falklands crisis.
Trends over the years have not been wholly to our advantage. The fact is that our shipping industry is immensely efficient, which has meant that it has not been necessary for the Merchant Marine in this country, unlike other countries, for example, the United States, to be subsidised. We have maintained the size of our fleet on the basis of efficiency and keeping down costs. The provisions within the Bill that are likely to create a less competitive environment in which costs tend to rise and in which our share of the market is not reflected by the efficiency of our Merchant Marine, are a cause for concern.
The Minister gave a categoric assurance in Committee that the Government were wholly opposed to the extension of the cargo-sharing arrangements into the bulk trades. I take that to mean that we shall not merely express a view at international shipping conferences but that we shall


actively oppose any moves to extend the cargo-sharing provisions to the bulk trades. Many hon. Members will be watching carefully to see the line taken by the Government in any such negotiations.
There is considerable cause for concern that some of the developing countries do not stick to, or abide by, the letter of the code and that this is to the disadvantage of countries such as the United Kingdom that do abide by it. It is essential that the Government, having gone along with the provisions of the code and put forward the Bill, ensure that developing countries take a responsible line within the confines of the code.
I viewed with some concern an article in the Financial Times on 8 June referring to the fact that the Indonesian Government have apparently decreed unilaterally that Government-owned goods shall be entirely carried in their own shipping lines. That is a worrying development. This has happened, I gather, despite the fact that provision is generally made when we extend export credit to ensure that some of the business goes to our own shipping lines.
The United States Government have apparently already protested about this decree but the British Government and the EEC, some months later, have not positively done so. It is not good enough, if the House is to pass this type of legislation, for the Government and the EEC not to take urgent action if developing countries seek to impose unilaterally the sort of measure that the Indonesian Government have introduced, outside the provisions of the code. The Government should take positive action to protect our national interest and to ensure that goods are not carried by high-cost, inefficient lines. Matters should be kept on a competitive level. Otherwise, consumers will clearly suffer.
The Bill, as it stands, is, in some senses, significantly better than when it was introduced. We have done quite a lot of work on it. I wish to pay tribute to the unfailing courtesy and sympathetic response of the Minister despite all the complexities. He has done a good ministerial job in answering the debates. I feel bound to say, however, that my doubts about the Bill are, if anything, even greater than at the time of Second Reading. I hope to see more improvements made in the other place. I shall, therefore, not wish to oppose the Third Reading.

Mr. Ginsburg: Reference was made in Committee to the importance of the Merchant Navy to this country and to the contribution that it was making to the Falklands campaign. It is only right that these words should have been reiterated by the Minister and other hon. Members. I should like to associate myself with them.
The Bill is, from a party point of view, noncontroversial. I do not know whether the Minister is able to confirm that the Bill is the same to the last comma as that over which the hon. Member for Hackney, Central (Mr. Davis) presided in the Labour Administration. It has, however, been altered appreciably today by some weighty new clauses. From a parliamentary point of view, the Bill has raised considerable doubts in the minds of hon. Members as an enabling Bill that gives considerable powers to bodies unaccountable to this place. Hon. Members were justified in expressing misgivings and considering whether such a blank cheque could be issued.
I am convinced that the Government were right to proceed with the measure because there is substantial evidence that, unlike that of the United States, which is

perhaps in a special position, this country's merchant shipping would have been seriously disadvantaged if we had not joined in the measure. If the measure were proceeded with internationally, as is happening, and Britain were one of the few countries that did not take it, the consequences to our shipping would be serious.
That is not to say that we are happy with everything that has happened either in Committee or on Report. Some procedural aspects of the measure are unique and not satisfactory. The committee did its job. Although the Bill has been changed only in certain respects today, the Committee was able to find out much information which, I think hon. Members will agree, it was the duty of the Government to have conveyed to Parliament much earlier.
We are right in paying a tribute to the Minister. He was unfailingly courteous and communicative, and wrote many letters. Nevertheless, information about accession to the treaty, who had acceded to it and who had not and what the reservations were was not known by Parliament or Committee Members until the Minister eventually came clean.
The Minister has provided substantial information about the accession. Some of what we learnt was not exactly reassuring. There are substantial reservations about the Soviet Government, the French Government and the Indian Government. Indian trade is important to this country. I ask the Minister to consider carefully whether we are in any way disadvantaged.
As to the future, perhaps "blank cheque" is not the right phrase, but certainly we are issuing a promissory note. The spirit of our deliberations is that considerable responsibility is laid on the Minister and whoever succeeds him to ensure that Parliament is kept informed of the way in which the wide powers under the legislation are implemented. Otherwise there are dangers that non-accountable powers could be exercised. In that spirit, I shall not wish to oppose the Third Reading of the Bill.

Mr. Michael Colvin: I support the Third Reading of the Bill. Hon. Members will be aware that I have not taken part in debates on the measure, so I should explain that my eleventh hour interest stems from my recent involvement in the activities of the Conservative parliamentary sub-committee that deals with shipping and shipbuilding affairs.
Having read the Official Report of the debates on the Bill to date, I am truck by the well-informed remarks of hon. Members. I pay tribute to the two-man opposition on Conservative Benches in the form of my right hon. Friend the Member for Worthing (Mr. Higgins) and my hon. Friend the Member for Uxbridge (Mr. Shersby). There is little that I can add at this late stage to what has already been said on the measure, so my contribution will be short.
Experience with both shipping and civil aviation has shown that regulation is far from essential in international transport markets. British shipping would still be better off without it. A measure of self-regulation, for that is what the conference system is, may be required, but not a Government-imposed carve-up. Equally abhorrent to me is the idea of a system devised by the United Nations, which should have better things to do, such as preserving world peace.
However, we live in an imperfect world. Developing countries are determined to have their slice of the cake. The UNCTAD liter code that is the subject of the Bill


seems to be an acceptable way of sharing out the business, particularly when the exclusion of infra-EEC trade is taken into account, so I hope that the Bill will get a Third Reading.
However, the European Commission needs to do a little more urgent work on its sea transport competition policy. At first sight, there appear to be possible areas of inconsistency or conflict between the policy in the EEC council regulation 954/79, which was much discussed in Committee, and what is set out in document 10150/81 entitled "Competition Policy—Sea Transport", which came through my letter box earlier this week and which has recently been looked at by the Select Committee on European Legislation, &c. That Committee concluded, having taken outside evidence from bodies such as the General Council of British Shipping and the National Union of Seamen, that it should recommend that the instrument be considered further by the House. When we do that, we should bear in mind also the provisions of the Bill and regulation 954/79.
The Bill is only an enabling measure. I am sure that there will be time to iron out the European wrinkles, perhaps before the Bill reaches another place and certainly before the Secretary of State seeks to give effect to the code.
Hon. Members have referred to the vital role of our Merchant Navy in the Falkland Islands task force. I associate myself wholeheartedly with their praise for the heroism of our merchant seafarers who have plied, and are still plying, their business in the great waters of the South Atlantic. I also associate myself with the expressions of sympathy for the families of those who have laid down their lives in the fight for freedom.
This fourth arm of defence, as the Merchant Navy is often called, has shown that the operation to restore the international rule of law in the Falkland Islands could not have been mounted without British merchant shipping. That is why I would not support the Bill if I thought that it would damage our shipping industry. There are enough other difficulties for shipowners to overcome. The Falkland Islands crisis, by reminding us of the importance of a strong Merchant Navy, has, in the words of last Sunday's edition of The Observer,
thrown the industry a life-line.
We should now redouble our efforts to persuade Her Majesty's Government to throw that vital industry more than a life-line. I sould like to see investment incentives improved. The extra 40 per cent. tax allowance called for by the General Council of British Shipping should be reinstated, perhaps for a limited period of three years. The world recession has hit the shipping industry hard. Grain markets have slumped. The developing nations, which have created the need for the Bill, are increasing their competition and manning and operating costs continue to rocket.
It is little wonder that our fleet declined by 18 per cent. over the five years from 1975 to 1981, while the world fleet grew by 25 per cent. Britain's fleet now represents only 4·3 per cent. of the world total as against 40 per cent. 20 years ago. Nevertheless, the British fleet still contributes £1·5 billion annually in foreign exchange to Britain's balance of payments.
If something is not done to restore investment confidence in shipping, it has been suggested that there

will be a growing number of so-called flagging out deals involving the sale and leaseback of ships, to which the hon. Member for Batley and Morley (Mr.Woolmer) has just referred.
If ship owners sell their ships to lower cost flags and charter them back at lower operating costs, problems of definition of national lines for the purpose of the UNCTAD liner code in the Bill are raised. I welcome the Minister's assurance in that regard.
It is appropriate to be debating shipping matters as the QE2 steams triumphantly back up the Solent having earned her Falklands battle honour. There will be just as many wet eyes at Southampton as when she left, but this time they will be tears of joy.
There is a verse in Walt Whitman's poem "Oh Captain, my Captain" which reads:
The ship is anchored safe and sound
its voyage is closed and done.
From fearful trip the victor ship
comes in—with object won.
It is with those words in salute of the QE2 and those who serve and are now travelling in her that I conclude my remarks and encourage the House to give the Bill a Third Reading.

Mr. Shersby: First, I should like to associate myself with the remarks from both Front Benches as to the contribution made by our merchant fleet and seamen in the Falkland Islands. I share 100 per cent. the admiration for their courage and bravery in this terrible conflict. I hope that it will serve to remind us all of the part that they have played not only in this conflict but in the Second World War.
On Third Reading, I find myself the only opponent of this curious measure. The liner code that the Bill seeks to implement is the first movement in the symphony that is being carefully orchestrated by the UNCTAD composers of the new economic order. It might well be entitled the "Sea Symphony", because its theme is an attack on the world shipping industry as we know it.
Advocates of the Bill deploy their arguments as if it were an aid measure for the developing countries. That could not be further from the truth, because it is not based on commercial reality. The cost to developing countries of running national shipping lines will have to be borne by the producers of their raw materials, thus lowering the revenue to the producers.
Ian Middleton, in a recent article in the Financial Times supplement on world shipping and shipbuilding, published on 3 June 1981, said:
Attempts to radically restructure international shipping in keeping with the principles of the 'new economic order' are gathering pace. The elements for an international regulatory framework covering all the fundamental aspects of shipping are on the agenda of Unctad's (United Nations Conference on Trade and Development) shipping committee. However, the progress made so far disguises a hardening of attitudes on all sides.
I wish that attitudes had hardened earlier so that the Bill, which is recognised by many people who know about shipping to be what Dr. Hermann, the legal correspondent of the Financial Times, described recently, following the first of our Standing Committee sittings, as the "worst of a bad job." The House of Commons is today debating the worst of a bad job. I do not regard it as a proud day for those who take an interest in such matters.
That was recognised by the commodity trades in the City of London when the possible ratification of the liner


code was first mooted in the Department of Trade's consultative document published in the late summer of 1980. Since then, the commodity trades have deployed every reasonable argument against the code and the Bill and have cited many examples to show what the code will do to their trade. In particular, they have pointed to the threat to non-conference operators. Even now the Bill does not contain any real safeguards for non-conference operators and the traders who use their vessels.
That is the first movement in the symphony. The second movement is UNCTAD's proposal for a code on bulk shipping. I say that because next week there is to be a conference in Geneva, and the fifth item on the agenda is a report by a group of experts on the problems of developing countries in the carriage of bulk cargoes. As my right hon. Friend the Member for Worthing (Mr. Higgins) pointed out, we have received a satisfactory assurance from the Minister that in no circumstances will the Government go down the road of a code for bulk cargoes. In Committee, the hon. Member for Batley and Morley (Mr. Woolmer) supported that line of thought. It is important that the House should make it clear today that Britain is not prepared to go down that road, despite UNCTAD's initiative to bring about what, as surely as night follows day, will be an attempt to produce just that effect.
That is not surprising. The Secretary General of UNCTAD made it clear some time ago that a greater participation by the developing countries in the carriage of bulk cargoes is one of UNCTAD's objectives as part of the new economic order. Therefore, it will require considerable strength and determination by the Minister and his successors to resist such a move. To return to the point made by my hon. Friend the Member for Bristol, North-West (Mr. Colvin), as approximately 80 per cent. of world shipping is bulk and free from any form of regulation, any move towards a bulk code poses a real threat to our shipping and commercial interests.
The third movement in the UNCTAD "Sea Symphony" develops the theme that was deployed in the first and second movements. It deals with flags of convenience or open registry shipping and will affect ships operating as liners or bulk carriers. UNCTAD would have us believe that ships carrying flags of convenience are old, unseaworthy, inefficient and crewed by under-paid seamen. That is not the case. Many vessels operating under flags of convenience are models of good design, efficiency and fair employment. Moreover, they provide a free, flexible and attractive development of the world shipping fleet. The removal of that facility would greatly damage our commercial interests.
We must listen to the whole symphony—one movement leading us on to the next. Ratification of the liner code will encourage integrity to achieve some form of regulation in the bulk trade, at the same time tapping out the tune of flags of convenience. The symphony has begun andante, but it will progress to molto vivace.
I see the liner code as unnecessary and unworkable, and a forerunner to other impositions on world shipping. Therefore, I cannot support the Bill. I believe that it is one of the most curious measures to be enacted in this Parliament.
Like many hon. Members, I am often asked at constituency meetings whether there are times when I disagree with my party. When asked "Are there times when, as a man of principle, you are prepared to show your

determination by voting against measures with which you fundamentally disagree?", I have always replied "Yes, of course. I am your man and a man of principle". So I have been throughout the passage of the Bill. I voted against its provisions in Committee, because the Bill is fundamentally wrong. In years to come, my belief will be justified.
I am only sorry that I do not face the assembled ranks of the Opposition parties on those empty green Benches. Opposition Members and other absent hon. Members might have been willing to join me in torpedoing the Bill and sending it to the watery grave that it so richly deserves. Unfortunately, it is a Friday and the Opposition parties, in their wisdom, have decided to support the Bill. Therefore, there is not much point in trying to drive that final nail into the coffin. I stand here as the opponent of the Bill. Be it known that the hon. Member for Uxbridge (Mr. Shersby) did not support it. I only hope that my words in Committee and in the House will not come true, but I greatly fear that, as the years go by, they will.

Mr. Sproat: By leave of the House, I should like to make a few comments.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): Very few.

Mr. Sproat: My hon. Friend the Under-Secretary of State is keen to get on with Foreign Office matters.
I begin by giving an unsolicited testimonial to my hen. Friend the Member for Uxbridge (Mr. Shersby) that he can wave at his constituents next time they ask him whether he ever opposes a Government measure. The answer is that he does and that he has shown great principle in so doing. I am grateful to him, and the whole House should be grateful to him and to my right hon. Friend the Member for Worthing (Mr. Higgins), for having raised many objections to the Bill and for having thus brought about improvements. Certainly my hon. Friend the Member for Uxbridge has made his opposition clear throughout. It has enabled us to discuss the Bill in greater detail and perhaps to understand objections put, in particular, by the commodity assoc ations. His objections have been valuable to all of us.
I shall deal swiftly and in order with some of the points raised. The hon. Member for Batley and Morley (Mr. Woolmer) gave his general approval to the Bill as making the best of a bad job. He said that the principle should not be extended to the bulk trades, and we agree with him 100 per cent. He said that there must be competition to liner conferences, and we agree 100 per cent. He said that we must protect United Kingdom interests, and we agree 100 per cent. Although we all agree that in a perfect world this is not the Bill that we should have liked to introduce, I am grateful for the hon. Gentleman's constructive criticism and support throughout the Bill's passage.
My right hon. Friend the Member for Worthing has the unsolicited testimonial of having put me through the most gruelling time as a result of his opposition to the Government's proposals. That is an extremely important part of our parliamentary procedures. On Third Reading he mentioned the importance of the Merchant Marine, which is directly relevant to the Bill. Although the importance of the Merchant Marine was recognised before, the events in the Falkland Islands mean that the


Government will have to look again at the future of the Merchant Marine and its role in support of the Royal Navy.
My right hon. Friend asked whether, in addition to making general remarks about not extending the principle to the bulk trades, we would actively ensure that that did not happen. The answer is "Yes." This very week I have been engaged in shipping discussions with my colleagues abroad on that matter. I made it clear that we must now prepare our ground to ensure that that principle does not extend to the bulk trades.
My right hon. Friend mentioned Indonesia. There is no compatibility with the liner conference code. The Indonesians have signed that code. The two actions are incompatible. We shall certainly point that out to the Indonesians and will try to persuade them that they cannot act in that way. The existence of the code, with its recommendation for a 40:40:20 split will make it easier for us to explain to them that they cannot proceed along the road of 100 per cent. of their own goods and vessels.
I thank the hon. Member for Dewsbury (Mr. Ginsburg) for his constructive support throughout the Bill and for drawing out of me—completely willingly—all those arcane facts about who had signed and why the Bulgarians had objected to certain parts of the code. Indeed, that remains something of a mystery to me. Nevertheless Romania and Czechoslovakia entered interesting reservations along a rather capitalist line. They seemed to say that there should be a great deal of competition for the liner conferences. I am all for that and am glad of their support. [Interruption.] I do not want to say more than those few words of commendation on their attitude. I also thank the

hon. Gentleman for underlining the difference between the United Kingdom and the United States of America in relation to cross trades.
I am extremely sorry that my hon. Friend the Member for Bristol, North-West (Mr. Colvin) was not a member of the Committee. I very much welcome his entry into our debates, even at this late stage. His important point about the European shipping competition policy interacts with what we are discussing. We are discussing the matter within the Community now and will certainly bear in mind what he said. I endorse what he said about the importance of the Merchant Marine and about the moving moment about seven minutes ago when the QE2 returned to Southampton from her hazardous voyage.
Perhaps my hon. Friend the Member for Uxbridge (Mr. Shersby) was the fons et origo of much of the opposition to the Bill. I have used that phrase because he flashed some Italian phrases at me and I thought that I would use a Latin one in response. He quoted Dr. Hermann of the Financial Times as saying that the Bill was the worst of a bad job. What Dr. Hermann meant, or should have meant, was that it made the best of a bad job. I see signs of dissent, but I am loth, at this late stage, to enter into altercations. However, the Bill would have made a much worse job of things if we had not got the derogations within the EEC that we obtained. Whatever else this Bill may be, it is not the worst of a bad job. As we know, in this vale of tears the best is often the enemy of the good and I would certainly have agreed with Dr. Hermann if he had said that.

I commend the Bill to the House.

Question put and agreed to.

Bill read the Third time and passed.

Orders of the Day — Taking of Hostages Bill [Lords]

As amended (in the Standing Committee), considered.

Clause 1

HOSTAGE TAKING

Mr. Clinton Davis: I beg to move amendment No. 1, in page 1, line 7, after '(a)', insert 'seizes or'.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take amendment No. 2, in page 1, line 7, after 'detains' insert
'or makes a threat with the purpose of detaining'.

Mr. Davis: I am glad that we can discuss amendment No. 2 with amendment No. 1. I am indebted to my hon. Friend the Member for Hamilton (Mr. Robertson) for having dealt with the Bill hitherto. However, he is helping to win a by-election in Scotland, which will be a nice experience. I intend not to undermine the purposes of the Bill, but to try to strengthen its purposes and to support the ratification of the convention by the Government.
In moving amendment No. 1, I wish to ascertain why the Government departed from the terminology of the international convention against the taking of hostages, which defines hostage-taking as
whenever a person seizes or detains and threatens to kill, injure or continue to detain a person in order to obtain something from someone.
The words that I stress are "seizes or" which are contained in amendment No. 1.
The Government consider rightly that in approaching an international convention by wishing to legislate for it we need not use the exact phraseology of the convention provided that the legislation embodies its purpose and spirit. Therefore, the Government would argue that it is not incumbent on them to adopt the word "seizes" if it is tautologous bearing in mind the presence of the word "detains". If that is the correct assumption, was that point taken by British representatives who participated in the drafting? Secondly, did they argue at that or at any other time that the term "seizes or" was tautologous? Thirdly, is there any room for doubt in the interpretation of clause 1?
Evidently, the international draftsmen considered that they needed to include the words "seizes or" and if there is the remotest doubt that the word "detains" does not incorporate that meaning, would it not be wiser to adhere to the terminology of the convention?
I readily admit that the words of amendment No. 2 go outside the terms of the convention. If the Government tried to advance that argument, they would be estopped from doing so because I should claim that the words do not represent a departure from the spirit or the real terminology of the convention. The Government were propared to depart from that terminology in. the previous amendment. Until persuaded that they were wrong in Committee, they also wished to import the words "without lawful excuse", which were not within the convention.
I pay tribute to the Minister for being flexible and for changing the Government's mind.
12.15 pm
My amendment is designed to define more clearly the word "detains". Whether it achieves that is another matter,

but I do not wish to discuss the difficulties of drafting, even on small issue; of draftsmanship such as this, because the Government could show possible errors in this drafting.
Does the use of the word "detains" catch the case of what I call constructive detention? I wish to assess whether the Government's phraseology includes terrorists who are not in direct physical contact with a hostage but who issue threats from afar that if he moves from a place something evil will befall him. In an age of modern technology, apparatus and sophisticated machines, threats such as those in my example can be uttered easily with dire consequences similar to those contemplated in Committee and those that have formed a large part of the international activity of terrorists in recent years.
Was there any discussion of that point when the convention was drafted? It was not discussed in Committee. If there is room for the slightest doubt, would it not be better to err on the side of tautology rather than to risk the escape from punishment, through a technical fault, of someone who has been found guilty of such obscene behaviour?

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): I am pleased to be able to reply to the hon. Member for Hackney, Central (Mr. Davis) and deal with the two amendments that he has introduced. The first amendment seeks to include the word "seizes" as well as "detains". The hon. Gentleman relies on the wording of the international convention in putting forward that suggestion. The purpose of legislation following an international convention is not necessarily to reproduce in exactly the same words, the new statutory provisions. Legislation is required only when the consequences of an international convention affect British law and some legislative changes flow from it. When we are dealing with specific statute law, much greater attention is paid to the drafting details as well as to the policy implications of the provisions.
There is no difference between the policy implications of the convention and the Bill. The simple question is, from a legislative point of view, what is more appropriate for the drafting? The word "seizes" adds nothing to the word "detains" in the context of the Bill and given the purpose for which it is drafted. The offence of hostage-taking, which is created by the Bill, has two elements. The first is the original detention of the hostage and the second is the threat to do something to him if another person does not act in a certain way.
If the person who has been defined as the hostage has not been detained, the offence cannot have been committed. Other offences might have been committed, but not hostage-taking. Therefore, either the seizure of the hostage amounts to detention, in which case we need only the word "detain", or it does not fulfil the requirements of detention, in which case whatever other offences might have been committed it would not constitute hostage-taking, nor should it.

Mr. Clinton Davis: I agree with the Minister. I was anxious to obtain his thinking about it. If he has the knowledge available, could he explain how it came about that this form of tautology was incorporated? Did the international draftsman think that there was a distinction between "seizing' and "detaining"? What was the rationale?

Mr. Rifkind: I cannot give an immediate answer about the thinking of the international draftsman. An international convention appears in numerous languages. Language is often used to ensure that the policy of the United Nations, or whatever organisation is involved, is fully understood and comprehended.
It is not intended to be a document in the sense of an Act of Parliament. Therefore, wording which may be more flexible in an international convention would not be appropriate in a statute. There may be some unnecessary duplication of language in an international convention that would not be appropriate in legislation. We are always conscious—although perhaps not all legislatures are—that if one word is sufficient, one word should be used, and unless a second word adds to the policy objectives of the legislation it would not be appropriate to put it in for appearance's sake.
An international convention does not contain an article full of definitions of the meanings of individual terms, unlike our own legislation which almost always contains such a provision defining the specific terms in order to give greater precision to its interpretation.
The second amendment seeks to introduce the words
or makes a threat with the purpose of detaining".
What concerns the hon. Gentleman is what he has correctly chosen to describe as "constructive detention"—detention which comes about not because of a physical restraint on the hostage but because of certain threats, the accumulative effect of which might in practice lead to the individual concerned being detained. The hon. Gentleman wishes to know whether the offence would have been committed.
I would make two points to the hon. Gentleman. First, detention, which is the matter that has to be satisfied, is a question of fact rather than a question of law. If the matter were in dispute it would surely be for the court to determine whether the facts and the circumstances amount to detention of the person concerned. If they do amount to detention, it should not matter one whit whether the detention has come about through physical restraint or because of threats or other actions which in practice have removed the voluntary element from the action taken by the individual described as the hostage, and which have led to his remaining in a place in which he would not otherwise have chosen to remain but for the action of the accused person. If those conditions have been fulfilled, detention will have taken place and "detains" is sufficient.
There is another reason why the hon. Gentleman's amendment is not appropriate. His amendment seeks to insert
or makes a threat with the purpose of detaining".
That purpose might or might not be achieved. Clearly, those words could envisage circumstances where, although the threat had been made, the purpose was not achieved and the person was not detained. If that happened, the offence of hostage-taking would not have been committed because the offence, to be committed, requires both elements to be fulfilled. There may still be an attempted crime but that is a separate matter and would not be directly relevant to the hon. Gentleman's purpose.

Mr. Clinton Davis: Would that inchoate offence still be caught by the Bill? I suspect that the answer is "No". Presumably, therefore, unless a person is amenable to our criminal law in one way or another, such an inchoate offence could not result in the sanctions envisaged by the Bill. Is that correct?

Mr. Rifkind: Not entirely. Under section 1 of the Criminal Attempts Act 1981 the attempt to commit the crime of hostage-taking would itself be an offence.

Mr. Clinton Davis: The Bill ranges far wider than the normal jurisdictional authority that is provided by our criminal law. If an offence is committed outside this jurisdiction, or by somebody other than a British national—I am talking now of an inchoate offence—it appears that they would not be amenable to British criminal law. Is that right?

Mr. Rifkind: The accused would come within the jurisdiction of the British courts because of the provisions of the Taking of Hostages Act, in which event the actual offence and the attempt to commit the offence would be equally possible as a consequence of the Act. If the act of hostage-taking did not fall within the jurisdiction of the British courts, the attempt to commit such an act would fail to follow. The two go together. I cannot imagine circumstances in which one would apply but not the other.
In a sense, this consideration is incidental to the main purpose of the amendment. The hon. Gentleman's main concern and the main assurance that he sought was that in circumstances which he described as constructive, detention would result in the offence being committed. I can give him the categoric assurance that that would be so. That is my view in terms of interpreting the legal basis of the clause and it is consistent with common sense. If detention, which is a matter of fact, has taken place, the relevant consideration is not whether it comes about because of physical restraint, or the threat to use restraint, but whether detention has happened, and has been followed by threats in relation to the other part of the offence. In those circumstances, the offence will have been committed. I hope that with that assurance the hon. Gentleman will feel that it is not necessary to press the amendment.

Mr. Edward Lyons: Am I right in thinking that the Bill catches hijacking wherever it occurs, even when there is no nexus with Britain, provided that the person involved in the hijacking comes to Britain? I am speaking of circumstances where there has been a detention of a person on the aeroplane, with a threat of some sort even to the pilot.

Mr. Rifkind: The international convention is concerned basically with a situation where a person may have either fled to or ended up in a particular country. Therefore, it provides two options to the country concerned. It can either prosecute the person concerned within the country, although the offence has been committed elsewhere, or it can extradite the individual to another country where prosecution will presumably follow. If in the action of hijacking the specific requirements in clause 1 were satisfied—detention of individuals followed by specific threats to them—that would constitute the offence of hostage-taking.

Mr. Lyons: Let us suppose that someone hijacks a plane to escape from what we would consider to be tyranny. If that person arrives in Britain at a later stage, perhaps years later, will we have to face the possibility that, as a result of the Bill, a country with which we are not in sympathy might make a demand for extradition, provided that we are in an extradition arrangement with that country? Will we not find ourselves in rather embarrassing situations from time to time?

Mr. Rifkind: That might be a factor in determining whether such a person might be more appropriately prosecuted in this country rather than being returned to the country from which he had fled. If it were thought that because of the political or other nature of the offence which had been committed the individual might suffer undue and unreasonable punishment, that factor might be taken into account.
It is the generally held view of the international community that it is highly desirable that the offence of hostage-taking should be discouraged by all means possible. Therefore, it is difficult to avoid the conclusion that where it takes place, even if there are background circumstances that mitigate the offence, it should be properly recognised as an offence. Given circumstances of the sort to which the hon. and learned Member for Bradford, West (Mr. Lyons) has drawn attention, these are factors that might be taken into account when determining whether extradition would be appropriate as opposed to other options that would be available under the convention and this proposed legislation.

Mr. Clinton Davis: Am I not right in thinking that article 9 of the convention specifically deals with the point raised by the hon. and learned Member for Bradford, West (Mr. Lyons)? The article says that it is not incumbent upon States to extradite where there is a possibility of some harassment or unreasonable penal measures being taken by reason of a person's beliefs, ethnic origins, or a whole host of other matters.

Mr. Rifkind: Yes, in the sense that article 9 of the convention deals with the possibility that extradition might be for the purpose of prosecuting or punishing a person on account of his race, religion, nationality, ethnic origin or political opinion, or that the person's position may be prejudiced for any of the reasons mentioned in the rest of the article. There are circumstances in which the political nature of the offence might be taken into account.
That relates to the request for the extradition of the alleged offender. I must again point out that there is, in any event, an alternative available to the State concerned, which is to prosecute within the country of the alleged offender for the action that he has taken.

Mr. Clinton Davis: The Minister has given a convincing explanation as to why the amendments are superfluous. I hope that he is right, and the courts uphold his judgment.

Mr. Rifkind: So do I.

Mr. Davis: As what the Minister has to say is not read in the courts, he will not be subject to any great criticism. I am not quite as happy about the Minister's explanation of the question of the attempted offence, but that is not within the scope of the amendment. Having regard to the Minister's explanation. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Rifkind: I beg to move, That the Bill be now read the Third time.
As the House will be aware, the Bill is the legislative consequence of the decision by the United Kingdom to ratify the international convention against the taking of hostages. As I mentioned earlier, the offence of hostage-taking is defined as involving two elements—the detention

of a person, followed by a specific threat as to certain action that will follow if third parties do not perform in a way acceptable to the person responsible for the taking of a hostage.
Clearly this is a matter that the international community as a whole has been concerned about for some years. This convention, following as it does on other conventions relating to other forms of international terrorism or other undesirable forms of activity, is one to which the House will no doubt wish, to give its support.
Although the primary purpose of the convention is to deal with the possible taking of hostages in political or international acts of terrorism, the wording of both the convention and the legislation is not restricted to political or international acts of this kind. It also envisages the possibility that hostages may be taken for the purpose of private gain. There may be no political or international implications, but a person might detain another person and threaten to take certain action unless certain demands were met. That is also something that must be guarded against, and it is appropriate that it should be covered by the legislation.
The Bill has already been welcomed by both sides of the House, and it is on that basis that I commend it to the House.

Mr. Davis: As one who has come recently to the Bill, I am perhaps permitted to range a little more widely than has the Minister. In so doing, I wish to give an unqualified welcome to the Bill, as did my hon. Friend the Member for Hamilton (Mr. Robertson) in earlier debates.
There can be no doubt that the taking of hostages, 'with the concurrent threat to the safety or lives of those held hostage for the purpose of bargaining for some, often dubious, political advantage, is an obscene crime that in recent years has multiplied far beyond what would have been considered possible some years ago. Taking hostages is a cancerous tactic engaged in by gangster elements. It represents a dagger thrust against the heart of democratic societies and orderly, civilised international relationships. It is on the same level as the murder, or attempted murder, of diplomats, as regrettably we witnessed on the streets of this very city only days ago in the attempted assassination of a distinguished diplomat, Mr. Shlomo Argov, who happens to be a friend of mine.
The tragedy is that thousands of people are trained and educated as merchants of terror. They are armed for that purpose with the most sophisticated weapons and techniques, notably in the Soviet Union and its satellites, in Syria, Libya and many other places. It is no less a tragedy that many tyrannies of the Left and the Right hold whole communities hostage. They, of course, cannot be dealt with by a convention. However, the inability to deal legislatively with that behaviour cannot justify a refusal to take the limited action prescribed by the convention and the Bill.
The further tragedy is that so many countries are prepared to aid and abet such forms of crime by the provision of safe havens for the perpetrators, or by weakness in the face of threats. Such conduct is an incentive for further criminality. There can be no doubt that such crimes are highly infectious.
I regret that Britain itself has not always been strong and resolute in dealing with such crimes. While the Iranian embassy siege was a supreme example of courage by our


police and Armed Forces, which must have inspired confidence in counter-terrorist activities throughout the world, I hope that never again will we be guilty of the cowardice depicted by the way in which we treated the case of Leila Khaled in the autumn of 1970. Having clearly been involved in an outrageous crime, she was released and sought refuge in an Arab country. She never suffered at all for having been involved in an appalling offence. We have learnt a lot since then. The seige of the Iranian embassy—and there are other examples—has made up for the weakness to which I have referred.
I compliment the Minister on the way in which he has taken the Bill through the House. I have not had an opportunity to compliment him publicly, although I have done so privately, on his move to the Foreign Office. My hon. Friend the Member for Hamilton was astonished that an appointment to the Foreign Office should be regarded as a promotion from the Scottish Office, but that is the way of things. I am sure that the Minister will be a distinguished member of the Foreign Office team, although I hope not for too long.
The Minister rightly said that the Bill is not confined to political acts of terrorism and that the taking of hostages for extortion for private gain or other purposes will also be caught by the Bill's provisions. That is as it should be. The other great benefit of the Bill is that it enables us to try and, if they are convicted, punish persons, regardless of nationality for such offences committed here or elsewhere.
That is important for the reasons that the Minister stressed in answer to the hon. and learned Member for Bradford, West (Mr. Lyons), because there is no certainty in all cases that extradition is the appropriate way to deal with the matter. Where the result of extradition would be to punish or harass a person because of his religious, political or other beliefs mentioned by the Minister, it would be highly improper to extradite. It would be equally improper when there is a reasonable belief that a trial would not take place.
For instance, an Arab country might be prepared to harbour members of the PLO carrying out such offences. I do not confine my remarks to the PLO; there are many others involved in this merciless activity. In those circumstances, it is absolutely right for us to reserve the right to try such persons. The House will hope that international society would recognise that that form of offence has to be properly and effectively dealt with by a fair trial.
My sadness about the Bill is similar to that reflected by my hon. Friend the Member for Hamilton in the Second Reading Committee on the length of the time that it had taken for the Bill to be considered by the House. Regrettably, we are not alone in that dilatory action. Many other countries that ought to have ratified by now have not done so. Only 22 nations are required to ratify to bring the convention into effect. I believe that only 17 have done so. Belatedly, progress is now being made which would suggest that ratification is not far removed.
However, I find the Minister's explanation for the delay less than convincing. He stated:
He"—
my hon. Friend the Member for Hamilton—
will of course be aware that there has been a heavy legislative timetable over the past couple of years, and the Bill must be

considered in this context. The position of the United Kingdom is favourable in relation to the international community."—[Official Report, Second Reading Committee, 28 April 1982, c. 11.]
The Minister sought to put the matter into perspective.
I find it unacceptable that in more than three years legislation of that kind cannot be brought forward because of other legislative demands. It is not a politically contentious Bill. It has taken up little time in Committee and in the House. Everybody who has spoken has tried to improve and strengthen the Bill. The Minister has played a noble part in answering those debates and putting forward convincing explanations. We have to find a better way to ensure that this type of legislation is brought forward far more rapidly so that the country can exemplify a will to proceed expeditiously. Unless we are prepared to provide that example, others will be only too happy to follow on far behind and, as a result, the implementation and enforcement of the convention will be deferred. If we deal with such matters in the future, I hope that the Government recognise that it is the will of the House to ensure that consideration of the legislation is expedited.
I am glad that the Bill is proceeding to its conclusion. It is an important part of the apparatus to deal with the problem of international terrorism. I end by quoting the words of the Nobel prize winner Andrei Sakharov in 1980. He was interviewed by the Washington Post soon after he had been compelled to go into exile. He spoke of to deteriorating terrorist phenomenon, and stated:
Among the problems which trouble me is the irrationality of international terrorism. No matter how high the aims predicated by terrorists (and often there are no such justifications), their activities are always criminal, always destructive, throwing humankind back to a time of lawlessness and chaos, provoking (perhaps with the help of the secret services of foreign governments) internal and international complications, contradicting the goals of peace and progress.
I unreservedly condemn the terror of the 'Red Brigades', the Basque and Irish nationalists, the Palestinian, Jewish and Ukranian extremists, the Moslem Brotherhood, the Armenian 'avengers of the genocide of 1915, and all other terrorists. I hope that people all over the world will understand the deadly nature of terrorism whatever its goals and will deprive them of any kind of support, even the most passive, and surround them with a wall of condemnation.
I believe that through the passage of this Bill we are doing our part to translate those memorable words into effect.

Mr. Edward Lyons: The Social Democratic and Liberal Parties have welcomed the Bill throughout. Any measure that adds to the flexibility of the international community to deal with terrorism should be welcomed.
With modern travel, the world is contracting rapidly. We can no longer view matters, including the enforcement of international law, in an insular way. The principle has always been that a British court could not prosecute an offender if the crime had no contact with Britain. But with international terrorist networks, the growth of terrorism, the ruthless methods of operation and the fact that terrorists have several passports and can move rapidly from one country to another, any country that has within it a terrorist who is alleged to have committed crimes should be able to arrest and try him.
The convention that the Government seek to implement allows prosecution only for taking hostages. In some ways that is artificial. If the crime were committed in Britain, a range of charges could be brought, such as carrying


firearms or murder. Had the crime taken place in Britain, the prosecuting authorities doubtless would not use this legislation, as a range of other charges could be brought. If they did use the legislation, they would use it in addition to the range of other available charges.
Where offences are committed abroad and the trial takes place here, since the charge of carrying firearms or murder cannot be brought, because the offences had no nexus with this country, a judge would be driven to sentence for those offences not because they have been charged, but because they emerged during the trial as having taken place. That is not an entirely desirable way of sentencing people, because it is sentencing them for doing things with which they are not charged. None the less, despite that drawback, the convention represents a step forward. It means that we are marking in an international convention, enforced in a number of countries, our disapproval of and distaste for international terrorism.
I am a little worried that some of the examples of the ways in which this convention will work in due course will turn out to be rather surprising, in a way that we do not like. Suppose, for example, that we want to extradite a person, who has committed a crime in Britain, who is in the territory of another signatory to the convention which has introduced legislation similar to the legislation that we have introduced to implement the convention. That country could say "Sorry, you cannot have this man back. We intend to charge him under our domestic legislation implementing that convention for taking hostages." We may know that the intention is either to ensure that that man does not get a fair trial or, as is more likely, to ensure that he gets off lightly.

Mr. Clinton Davis: That situation could almost certainly arise outside the scope of the convention. It could be argued that the person would not get a fair trial here. If a Government were to act with such mala fides, they could invent arguments of that nature to justify a refusal to allow extradition, and perhaps such an argument could be entertained. In my opinion, that is not a very convincing argument.

Mr. Lyons: I thank the hon. Member for Hackney, Central (Mr. Davis) for those comments. I agree that for most of the time what he says will be correct, but there could be circumstances in which a court in such a country, listening to an application for extradition on behalf of the Government, might say "The Government of this country"—that is, the Government of the country where the application is being heard—"now have power to opt for a different course which involves justice"—apparently—"being done." It could, therefore, refuse the application for extradition in cases where, but for a similar Act in that country, it would have to say, "We must accede to this application by the British Government for extradition because we have no right to try it in our country." I hope that one day there will be a convention to deal specifically with murder in a similar way to what is proposed in the Bill.
The hon. Member for Hackney, Central complained about the delay in making progress on the Bill. He should also consider, as I am sure he does, the delay in implementing the European Convention on Human Rights. That convention has been in existence for a long time, but no British Government have yet decided to introduce domestic legislation to enforce it.
None the less, the Bill is a step forward in the protection of human rights. Therefore, it is to be supported and welcomed. We hope that it will assist in the drive to deal strongly with international terrorism. I concur with the remarks that have been made about the increasingly strong way in which the British Government are dealing with terrorism. It contrasts sharply with the treatment of terrorists years ago. It is obvious that one encourages terrorism unless one deals with it totally. There is no alternative but to deal with it in a principled and firm way, and the Bill will help in that regard.

Mr. Rifkind: With the leave of the House, Mr. Deputy Speaker, may I say that I thank hon. Members for the warm welcome that they have given to the Bill and associate myself with their strong condemnation of all kinds of terrorism, whatever form it might take. I agree with the comment of the hon. Member for Hackney, Central (Mr. Davis) about the attempted assassination of the Israeli ambassador. That is a good example of the behaviour that we must all unite to try to prevent wherever possible.
The hon. Member for Hackney, Central suggested that there had been undue delay in bringing forward the legislation. I do not think that that is an entirely reasonable point to make in the circumstances. In the ratification of international conventions, two years is not considered significantly long by most standards. Of the 40 countries that signed the convention now under discussion, only 11 have completed the process of ratification. A further five among those that (lid not sign the convention have acceded to it.
Even if the Government had brought forward the legislation earlier, it would not have made any difference. Until 22 countries have ratified, the convention does not take effect. I am not suggesting that this in itself is an argument for delay. The more countries that bring forward legislation at an early stage and ratify at an early stage, the sooner the convention will come into force. I am merely indicating a simple fact that the enactment of the legislation will not produce any significant changes until the twenty-second State has ratified and the convention comes into force.

Mr. Davis: I accept what the Minister says. I believe, however, that this country should be eager to lead the way. I do not discern that eagerness in this instance. Such eagerness would encourage other nations to do likewise. I do not understand why we have deferred taking action up to the present time. If there are the legislative difficulties to which the Minister has alluded, I am certain that the Opposition would wish in the future to do everything possible to assist the Government to ensure the speedy legislation of this form of Bill.

Mr. Rifkind: The hon. Gentleman will acknowledge that, over the last couple of years, the House has not been exactly short of legislation. Inevitably, it was legislation that had greater priority in terms of its passage through the House. On the matter of setting an example, I would point out that, of the 40 signatories of the convention, only 11 have ratified. The United Kingdom is therefore in the forefront of countries completing the process of ratification.
The hon. and learned Member for Bradford, West (Mr. Lyons) was concerned that, because the question of


jurisdiction for offences related only to offences under the Bill in respect of actions that take place in other parts of the world, this might result in people being sentenced for things that did not come under the crime with which they had been charged. Under the terms of the Bill, the maximum penalty for the crime of hostage-taking is life imprisonment. There is nothing undesirable in principle in a court, when determining what should be the appropriate penalty for one convicted of this crime, looking into the circumstances of the crime and the consequences of the crime. If a person had lost his life as a consequence, that itself would be sufficient ground for imposing a sentence of life imprisonment.
The implication of the hon. and learned Gentleman's remarks was that there is some technical way of imposing life imprisonment even though a person cannot be charged with murder. It does not matter in this context whether he can be charged with murder. The crime of hostage-taking, if it was to result in the death of a person, would be sufficiently serious to justify life imprisonment in certain circumstances.

Mr. Edward Lyons: I agree entirely with the Minister except to say that, if one concludes that killing a number of hostages is more important than the taking of the hostages and one charges only the lesser offence, and than the judge sentences really for the more serious matter because life imprisonment is the maximum sentence, there is no alternative but to do that. That is the limit of the convention. None the less, it is an undesirable principle to punish people by a side wind for more serious offences when they have been charged with lesser offences. A man may have massive evidence against him for hostage-taking but possibly has some defence never fully adduced on a charge for one or more of the killings. The court might say that that is not the charge, although at the end of the day, if the judge came to the conclusion that the man was responsible for the killing, the judge would ensure that he got life imprisonment, whereas otherwise he might get only 12 years. I am saying not that there is any way out of that, in view of the convention, but that on the whole it is undesirable that men should be sentenced for one offence when charged with a different one.

Mr. Rifkind: The hon. Gentleman says that that is what is likely to happen. I agree with him. I do not think the man would be sentenced for an offence that he had not been charged with. He would be sentenced for an offence for which he had been charged and convicted. If that offence were hostage-taking and if the hostage-taking involved loss of life, it would be a sufficiently serious example of hostage-taking to justify a life sentence. It would be wrong to create the impression that judges would have the opportunity to impose sentences for crimes with which a person had not been charged.
The fact that the House has agreed and the convention anticipates that the maximum penalty for the crime of hostage-taking should be heavy, which in United Kingdom law means life imprisonment, is justifiable. There are manifold circumstances, not necessarily involving just loss of life, where a heavy sentence would be appropriate.
It is on that basis that I say that the wording is appropriate and that the concern expressed by the hon. Gentleman, although I understand his reasons for it, need not be maintained for any period. I accordingly commend the Bill to the House and thank the House for its support.

Question put and agreed to.

Bill read the Third time and passed.

ENVIRONMENT

Ordered,
That Dr. Brian Mawhinney and Mr. James Pawsey be discharged from the Environment Committee and Mr. John Heddle and Mr. Richard Alexander be added to the Committee.—[Mr. Philip Holland, on behalf of the Committee of Selection.]

ENERGY

Ordered,
That Mr. John Watson be discharged from the Energy Committee and Mr. Tony Speller be added to the Committee.—[Mr. Philip Holland, on behalf of the Committee of Selection.]

TRANSPORT

Ordered,
That Mr. Gary Waller be discharged from the Transport Committee and Mr. David Mudd be added to the Committee.—[Mr. Philip Holland, on behalf of the Committee of Selection.]

Orders of the Day — Video Cassettes

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]

Sir Paul Bryan: I declare my interest as a director of Granada Television.
I bring to the attention of the House a scandal of which we should be thoroughly ashamed. Over the years the British law on copyright has been respected and has been a model for the law in many other countries. That is an area in which we presume to advise others. However, in the exploding trade of video tape recording we are the world leader, not in copyright, but in video piracy. The Government sit inactive in the background while an industry that should have been the saving of the film industry and a unique stimulus to artistic production is becoming a den of thieves.
When video piracy started no more than two years ago it was the plaything of amateurs, but with the rewards so great and penalties so laughable it is inevitably sinking into the hands of gangsters, the same people who run the drug rings. What I am asking for today is not a new copyright Act, which could take five years, but an immediate increase in the penalties provided for in the 1956 Act, which could be achieved in five hours by a simple noncontroversial amending Bill.
Britain is internationally regarded as the world leader in video piracy. Three factors combine to bring about that national disgrace. The first is the wide international use of the English language, the second is the fact that our PAL colour television system is used throughout the world, unlike the American system, and the third and most important is that our laws, and especially our criminal laws, do not provide remedies and punishments for piracy remotely adequate to deal with the size of the current problem.
The astonishing phenomenon that has left the Government standing and has frankly surprised us all is the speed and the size of the video boom. There are now 1·5 million video tape recorders in Britain. At the end of the year there will be 3 million—one recorder for every six homes. By the end of the decade half the homes in Britain will have video tape recorders.
People do not buy or rent expensive video recorders without meaning to use them every day. Therefore, an enormous video tape industry has sprung up overnight. "Star Wars", "Chariots of Fire", "Watership Down"—all the most popular films—can now be seen in the home. At first sight this looks like the rebirth of the film industry. In the event, no money from the sale of over half the tapes goes to artistes, producers, distributors, or in VAT to the Government. Video piracy now accounts for at least 65 per cent. of the market—a staggering £100 million.
One has only to see how simply copyright material can be recorded, and how rich are the pickings, to understand this eruption. At the amateur end of the trade is the lady on the council house estate who records feature films from her television and rents them to her friends. At the professional end there is the bent projectionist who, after the evening performance of "Star Wars" lends the film for a consideration, perhaps £300 or £400, to a local recording organisation. From the reels of celluloid film a master video tape is made from which hundreds of illicit video

casettes are made. The pirate operator can have up to 40 video cassette recorders working 24 hours a day to churn out copies at £30 a time.
Alternatively, the film will be taken from the cinema to a duplicating bank where it will probably be run through a Rank Cintel machine and transferred on to video tape. Thirty or 40 master copies might be made, and each one of those can be sold to dealers at a price of more than £1,000 each.
When the illicit trade started, one could easily detect pirate tapes by the crude packaging and labels. However, the trade has now been picked up by sophisticated criminals and the whole tape package is indistinguishable from the genuine article. Small-scale film piracy is now being superseded by internationally organised crime with professionally counterfeited video cassettes supplanting the easily recognisable pirated copies. London is at the centre of this illegal industry and London and the Home Counties boast more duplicating organisations than the whole of America.
The legitimate trade has not taken the illegal developments lying down. Independent television companies, the BBC and the Society of Film Distributors have formed the Video Copyright Protection Society under the chairmanship of Barry Heads. The British Video Association has been active in defending the legitimate trade.
Both those organisations are understandably desperate at the complete lack of any Government reaction as their industry sinks rapidly into this mire of corruption. The Government sit peacefully waiting for observations on last year's Green Paper which, in turn, is a commentary on the Whitford report published in 1977 but instigated in 1973.

Mr. Michael Shersby: I am most interested in what my hon. Friend is saying. Is he aware that I am looking after a Private Member's Bill designed to amend the Copyright Act 1956 which would be an interim solution until there is a major Government reform of the copyright law? That Bill has already passed through another place and I hope that it will have its Committee stage and its Third Reading on 9 July. That would be an interim measure to deal with this serious problem.

Sir Paul Bryan: I know about that and I hope that my hon. Friend will contribute to the debate and tell us all about it.
The Government are still waiting for observations on the Green Paper. All that is entirely irrelevant to the present crisis. Technology has raced past the Government's deliberations. Lord Lyell, speaking on behalf of the Government in another place, said:
We are of the opinion that this particular subject, and piracy of videos and films, requires a little more detailed thought before we move to definite legislation, and when we introduce legislation, as we shall in due course—and I hope much sooner, rather than later— would hope to produce a series of effective measures, with effective remedies."—[Official Report, House of Lords, 15 February 1982; Vol, 427, c. 370.]
He was speaking not only in another place but in another world.
The Government are oblivious to what is happening. They must increase the penalties at once. Although effective civil law remedies are available to copyright owners in the form of High Court injunctions, they are extremely costly, with preliminary private investigations, the acquisition of evidence and legal fees. The expense to


the copyright owners of a group of cases can amount to a six-figure sum. That means that copyright owners can deal with only a few of the piracy operations reported to them.
Civil law remedies are no deterrent. For video piracy to be crushed, it is imperative that the police should be involved and the criminal law invoked. At present the penalties under the Copyright Act 1956 are restricted on first offences to the imposition of fines not exceeding £2 per cassette with a maximum of £50. Partly because of the ludicrously low penalties and partly because of manpower considerations, many police forces, including the Metropolitan Police, have issued directives to their officers not to investigate or prosecute cases of video piracy but instead to leave it to the aggrieved copyright owners to take the civil action that I have described. Can one imagine a more agreeable bed of roses for the criminal?
Before setting off for Europe, President Reagan signed into law the Piracy and Counterfeiting Amendment Act 1982, which provides for stricter criminal penalties for record, tape and motion picture piracy and counterfeiting. Under the new law, which came into effect the next day, 25 May, sound recording and motion picture pirates and counterfeiters, including first-time offenders, face maximum felony penalties of up to five years imprisonment or fines of up to $250,000. Previously first time offenders faced maximum misdemeanour penalties of one year in jail and/or a fine of $25,000. That is the reaction of a Government in a country with less video piracy than Britain. It is precisely the action that I wish from the British Government and it would have an immediate affect.
At the same time, I ask my right hon. Friend the Home Secretary to direct the police, especially the Metropolitan Police, to tackle the problem before it gets even further out of hand. Until the penalties are made punitive, we cannot expect the police to take serious action. It is an affront to the police to expect them to bring people to court with the prospect of a £50 fine on those earning many thousands of pounds from their criminal business.
Finally, I warn the Government that the problem is not merely increasing but rocketing. I have already forecast the inevitable increase due to the rise in numbers of video tape recorders, but the advent of cable television will give the video cassette industry yet another boost, for there will be so much more to record. Time is running out. The longer this illicit industry is allowed to grow, the more criminals will be financially committed to it and the harder it will be to eradicate. Meanwhile, through lack of Government action, many honest businesses will go to the wall and artistes will continue to be cheated of their just rewards.

The Under-Secretary of State for Trade (Mr. Iain Sproat): I congratulate my hon. Friend the Member for Howden (Sir P. Bryan) on bringing this matter before the House. I am pleased that my hon. Friend the Member for Uxbridge (Mr. Shersby) had the opportunity to intervene, albeit briefly, because I pay tribute to the hard work he is putting in behind the scenes in trying to ameliorate the present problems through a Private Member's Bill. Like him, I have every hope that when the Bill returns to the House on 9 July it will receive the blessing of the House.
We are grateful for the way in which he has helped us to try to find interim remedies for a problem that is quite shocking.
The Government share the concern of the film and video industries about the growth of commercial video piracy. Of course, there are legal remedies and they are most effective when applied energetically and systematically. Extensive damages can result from civil actions in the courts launched by copyright owners for infringement of their copyright. The civil remedies available under the Copyright Act 1956 provide for injunctions and damages, and prosecutions are helped considerably by Anton Piller orders. These empower a plaintiff to enter a defendant's premises to obtain evidence, that is, infringing articles. Anton Piller orders have been successfully used on a number of occasions as hon. Members may have seen recently in the newspapers.
The Copyright Act also provides criminal remedies against those making for sale or hire, importing, dealing in or exhibiting in public by way of trade, articles that they know to be infringing copies of copyright works. However, as my hon. Friend the Member for Howden made very clear, and I have great sympathy with his view, the penalties at present laid down are, to say the very least, not high but they do include imprisonment as a possible penalty for second and subsequent offences. Under the terms of the Criminal Justice Bill, the maximum penalty for each transaction that contravenes the Act will increase with the option of imprisonment being extended to first convictions. This goes some way towards meeting my hon. Friend's point and a further opportunity will arise when more general changes in the copyright law are introduced.
Nevertheless, I entirely accept that video piracy is a growing and extremely worrying criminal activity which, if allowed to continue to develop unchecked, can only undermine the legitimate market, including film producers, who need the profit from legitimate video sales as a contribution to the cost of film-making. Furthermore, pirate video films that appear on the market before the legitimate version—as many do—damage the trade of cinemas showing the screen version.
The industry now claims—I have no reason to dispute it—that pirate copies constitute almost three-quarters of the market in this country, with a retail value of perhaps over £100 million. These are deeply worrying statistics and something must be done to check this activity.
The Green Paper on copyright, published last July, makes several proposals to strengthen and improve existing remedies. They include extending the scope of the courts so that they can award exemplary penal damages in cases of flagrant infringements, making the possession of an infringing copy of a video recording in the knowledge that it infringes copyright an infringing act, and increasing the fines applicable in the cases of criminal proceedings to a deterrent level.
I should certainly want to consider the legislation that President Reagan has recently signed to see what lessons can be learnt from the American experience. It is, indeed, extraordinary that the larger and more populous country of America—I must consider my words carefully—where criminal activity is usually further advanced than in Britain, should appear to be less criminally advanced than Britain in this case, although it has been quicker to take action.
The Government must consider that example closely and quickly. I certainly undertake to do so. However, consultations on the Green Paper will pave the way for negotiations with our Community partners on harmonising copyright laws in the Community and, beyond that, will lead to a major reform of United Kingdom copyright law. Therefore, these procedures cannot be short-circuited. They can be extremely exasperating for those involved but they must he gone through.
Meanwhile, we must bear in mind the damage to legitimate commerce and the standing of the law. That is an important point. If nothing is being done about the fact that people believe that three-quarters of the video cassettes on sale are pirated and the result of criminal activity, the law will be undermined more by that than by those activities themselves.
I hope that I have said enough to show that I accept that more needs to be done to reinforce the law. I agree that there is a great discrepancy between the extended remedies proposed in the Criminal Justice Bill and what President Reagan has apparently been up to in the United States of America. That discrepancy between the present remedies, the proposed British remedies and the American remedies must be considered carefully. We must try to relate it to the facts and figures that the trade brings to our attention.
It has been said that £100 million of pirated cassettes are on the market and that value added tax is being lost. Many hon. Members might be jolly pleased that I am not a Treasury Minister, but even those Ministers who are most remote from the Treasury would quickly understand that £100 million of goods that are not paying VAT cause considerable suffering to the Treasury and to the Revenue. I am acutely aware of that because in my Department there are many areas in which £15 million would make a great difference to the amount spent on services, such as safety at sea.

Sir Paul Bryan: Will my hon. Friend comment on my remarks about the inactivity of the police and the directions received by some police departments that they are not to intervene in this world of crime?

Mr. Sproat: I am keen to respond to that point but I am restrained by the fact that this is primarily a matter for the Home Office. I agree with the implication of my hon. Friend's remarks, if I have understood that implication correctly. It is always worrying when one is told that the police have been instructed not to proceed against a

criminal activity. That is worrying in principle at any time, but it is perhaps particularly worrying when it affects a criminal activity with a turnover of £100 million a year. I suspect that £100 million is an underestimate now and with 1½ million video recorders and the number growing all the time—I am one of the 1½ million—we can expect that £100 million trnover figure to increase rapidly.

Mr. Shersby: Does my hon. Friend agree that the issue of police manpower would undoubtedly arise in dealing with the problem in the way that my hon. Friend has so rightly suggested? My investigations of the matter over many months now have made me aware that police manpower is one of the problems. It is not that the police are unwilling to deal with the matter but that the huge extent of the problem means that any increase in penalties, which I would fully support, must take into consideration the issue of police manpower.

Mr. Sproat: My hon. Friend raises an extremely interesting point. A turnover of £100 million with a VAT figure of £15 million could be used to increase manpower to fund the necessary exercise. I shall see that my lion. Friend's point about instructions to the police not to prosecute in such cases is drawn to the attention of my right hon. Friend the Home Secretary.
I have done all that I can to encourage the passage of the Copyright Act 1956 (Amendment) [Lords] Bill which was introduced by the noble Lord Fletcher. The Bill states that it is an offence for anyone to have in his or her possession by sway of trade a copyright, sound recording or cinematograph film which he knows to be an infringing copy.
The Bill is a good step in the right direction even though it perhaps does not go far enough. The Bill passed through all its stages in the House of Lords. It received its Second Reading in the House of Commons on 7 May and appeared for its remaining stages on 14 May. I thought then that the Bill was well on its way to the statute book as did my hon. Friend the Member for Uxbridge. We were all disappointed when it was blocked, perfectly properly, on procedural grounds for reasons we understand. It was an important Bill that was lost in one of those not too rare House of Commons deliberate procedural tangles. When the Bill returns on 9 July, I hope that it will receive the approval of the House. In the meantime, I hope that that will satisfy my hon. Friend that the Government are not so comatose or inactive as he might think.

Orders of the Day — Seal Culling

Mr. Michael Shersby: I am grateful for the opportunity, by way of a second Adjournment debate, to raise a matter of enormous concern to all Members of the House of Commons. I refer to the clubbing of baby seals and the proposed ban on the importation of seal products, which has been the subject of discussion in the European Assembly in recent weeks.
There are few subjects about which I have received more letters from my constituents in the past few weeks than that of the clubbing to death of baby seals in the presence of their mothers. It is clear to me that my constituents share the feelings of horror which have been expressed throughout the land about this objectionable practice. My constituents wish me, as their Member of Parliament, to raise this matter at the earliest possible opportunity with a view to getting something done about it. It is for that reason that I am glad to have this opportunity to talk on the matter.
I am glad to see my right hon. Friend the Leader of the House in his place. No one can be more aware than he that on the Order Paper are two important early-day motions dealing with the importation of seal products. Early-day motion No. 342 draws attention to the slaughter of 200,000 baby seals in northern Canada and calls for a ban on the importation into the European Community of all skins and products derived from the young harp and hooded seals. The motion has been signed by no fewer than 279 hon. Members. The latest addition is the name of my hon. Friend the Member for Beaconsfield (Mr. Smith), whom I had the pleasure of introducing on Tuesday. Early-day motion No. 344, which stands in the name of my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd), is in similar terms and has been signed by 232 hon. Members.
I know that my right hon. Friend the Leader of the House has tremendous difficulty in finding time for parliamentary debates, but I am sure that he will share my pleasure that we have a little time today to talk about the slaughter of seals, thus meeting the wishes expressed by so many of our colleagues in signing the early-day motions. I am glad that my hon. and learned Friend the Minister for Trade is on the Treasury Bench and ready to reply.
My right hon. Friend the Member for Worthing (Mr. Higgins), who was in the Chamber this morning and earlier this afternoon, shares my keen interest in this subject. Were it not for the fact that he has a surgery in Worthing this afternoon, for which he has had to depart, he would be in his place and anxious to participate in the debate.
I am glad to see my hon. Friend the Member for Watford (Mr. Garel-Jones) on the Treasury Bench. We all know that as a Government Whip he has great difficulty in contributing to our debates, but he is well known for his keen interest in animal welfare, especially the difficult problem that is the subject of this debate.
In recent weeks we have all become aware of the debates that have taken place in the European Assembly. The country knows that the European Assembly considered a petition that attracted about 3 million signatures, which was on display in the Assembly building. The Assembly considered public opinion and

passed a resolution by 160 votes to 10 that called for a ban on the importation of seal products from Canada in an attempt to draw to the attention of our Canadian friends the serious concern that is felt in Europe.
I pay tribute to the international animal welfare fund, which did so much to bring the matter to the attention of the European Parliament. It was largely responsible for the resolution being passed.
The crux of the matter is that the British people and the people of many other European countries are strongly opposed to the clumsy and brutal killing of these beautiful creatures in the presence of their mothers. The fact that they are killed in a clumsy and brutal manner is substantiated by all the reports that we have read in the press and seen on television. I shall quote briefly from an article that appeared in The Times on 11 March. It reads:
Charlottetown, Prince Edward Island, March 10.—The annual seal hunt in the Gulf of St. Lawrence lasted only a few hours for land-based hunters before it was closed because of bad ice and wasteful killing by inexperienced hunters.
The report continues:
The main reason for closing the hunt was poor ice conditions
The reporter added that
most of the Prince Edward Islands hunters were inexperienced. 'Hunters are just ruining pelts in some cases. Conditions were so bad that we just can't control the thing.
This method of slaughter, which some Canadians have attempted to justify as being humane, is, on their own admission, a clumsy method. Quite apart from the dreadful suffering that it must inflict on these poor creatures, it is also ruining the pelts, which are exported by Canada, and which bring in £3.2 million a year.
Our objection is that it is a degrading practice that we find very difficult, indeed, almost impossible, to accept. Every hon. Member would wish to acknowledge that the Canadians are hunters. However, in recognising that, we say that they cannot continue their long-established practice of hunting and at the same time ignore the revulsion felt by so many of their fellow citizens in other parts of the world. I am sorry that the Canadian Minister of Customs and Excise, Mr. Bill Rompkey, has taken it upon himself to threaten that Canada might refuse EEC fishermen access to Canadian waters if the EEC were to impose a ban on products derived from seals.
The Canadians are our friends and relatives and we share with them a common heritage and a love and respect for all animals. It is difficult for us in Britain to accept, as do our Canadian cousins, the killing of these animals for their pelts in this brutal way. They are more used to hunting than we are. We in Britain are today remote from the hunting and killing of animals for food and skins. It is something that has faded into the background of our consciousness.
What is to be done? Is a ban on the importation of seal products, as is desired by so many of our colleagues in this House and the European Assembly, the best way to deal with this matter? Will the labelling order, enabling those opposed to seal killing to avoid the unwitting purchase of sealskin products, be enough to satisfy public opinion? I welcome the change in the labelling regulations introduced by my right hon. Friend the Minister of State earlier this year. However, I suspect that the changes in this labelling regulation, although they are welcome and demonstrate the concern of the British Government about this product, are not enough to satisfy public opinion, or Members of the House or of the European Assembly.
It is not just sealskin products that are the cause of this massive protest. It is the method of the killing of the animals that is at the root of the problem. Therefore, we need to try to persuade our Canadian friends that there must be some change in this practice. I appeal to my right hon. Friend to say whether he feels that the British Government can, through their many contacts with the Canadian Government, make it clear to them that it is the practice of killing these animals in this way that is at the root of the problem. It is that which, if changed, would help to deal with the problem.
In addition, I should like to suggest that our Canadian friends might like, through the high commission in London and embassies abroad, to improve their contact with parliamentarians and initiate discussions with them that would enable them better to understand the strength of feeling and perhaps take action that would remedy the problem. It is important that the Canadians should not feel that we in Britain are attacking them. We have the most tremendous respect and affection for all Canadians. They are our friends and allies, and we do not want them to misunderstand us. We want them to understand that we and people in other parts of Europe find it difficult to accept the practices that are familiar to them and by which they continue killing these animals for their pelts. I hope that the Canadians will address themselves to the problem and recognise that a step forward in the direction that I suggest would be helpful, and enable proper debate and a solution to be found.
Any hon. Member thinks twice about bringing a busy Minister to the House late on a Friday afternoon to deal with any issue. I know how busy my hon. and learned Friend is and I thought twice before asking him to come to the House, but I took the view, which I think he shares, that the subject is so important and generates so many letters that we cannot delay further before hearing a statement of the Government's feelings.
I am glad that we have been able to ventilate a problem which has drawn to the attention of the Leader of the House and the Government by the many right hon. and hon. Members who have signed early-day motions Nos. 342 and 344.

Mr. Richard Page: I support my hon. Friend the Member for Uxbridge (Mr. Shersby) and congratulate him on his ingenuity in seizing a window in parliamentary time to raise this important issue. We are neighbours, not only because of the closeness of our constituencies, but in our agreement on the issue. I am delighted to see in the Chamber my hon. Friend the Member for Watford (Mr. Garel-Jones) who guards the northern reaches of my constituency and agrees with us. I do not wish to be political, but I am disappointed that the Opposition Benches are vacant. Not one Opposition Member is here to express a view on an important and serious subject.
I am not against culls. With mankind's involvement or interference in the environmental balance of the world, various animal population surges will produce imbalances. I regret that they must be checked. I wish only that the enthusiastic efforts which go into controlling such surges were matched at least by equal efforts to prevent the declines. The list of endangered species grows daily.
I approve of the EEC's concern and understand the reasons for the total ban on pelt imports, but the EEC

resolution, although passed almost unanimously. will do little if anything to stop the annual cull. The EEC countries may not buy the pelts and the products, but the cull will continue. Perhaps it will not continue to such an extent, but it will still happen. We must ensure that culling is done in a more humane fashion. The bashing of seal pups on the head is not only barbaric but, putting it charitably, an inexact science. Surely, with all man's skill and ingenuity, we can devise a more humane and certain method.
In the United Kingdom we have a selective conscience. I have been deluged with letters from many constituents about the import of seal products, but I have received only one complaint about the ritual slaughter of animals which takes place daily in Britain. That process is legally approved by the House. I find it even more barbaric because the health reasons that prompted such centuries old practices no longer apply.
However, I shall work on the well-known military practice of fighting only one battle at a time. I hope that pressures from tie House and the Government will expedite legislation in Canada so that more humane culling methods are used. Such methods are available and must be introduced.

The Minister for Trade (Mr. Peter Rees): May I without reservation congratulate my hon. Friend the Member for Uxbridge (Mr. Shersby) on introducing this important subject. He is far too modest in apologising for bringing me here today because I am grateful to have the opportunity to say how far Government thinking has developed on such a sensitive issue.
I need not emphasise that there can be no hon. Member who is not aware of the depth of feeling on this subject not only from personal observation and contact but from the flood of letters that I am sure all hon. Members have received. I shall single out those hon. Gentlemen whom I know have been worried about the matter. My hon. Friend the Member for Uxbridge has been ably supported by my hon. Friend the Member for Hertfordshire, South-West (Mr. Page). We are aware of the continuing anxiety shown by my right hon. Friend the Member for Worthng (Mr. Higgins) and my hon, Friends the Members for Eye (Mr. Gummer) and for Watford (Mr. Garel-Jones). The strength of the House's interest has been demonstrated by the early-day motions to which my hon. Friends have drawn attention.
I should not like the world to imagine that the House is not fully alert to the feelings of people up and down the country on this topic or that the Government are insensitive to those feelings. I was delighted when I heard that my hon. Friend the Member for Uxbridge had seized this opportunity to raise the matter. It gives me a chance to state the Government's position.
There has been continuing interest shown by successive Governments in the question of seal culls and in the conservation of wildlife species in general. There was the Conservation of Seals Act 1970 under which the Home Office licenses the cull of common grey seals. Both the Home Office and the Ministry of Agriculture, Fisheries and Food are interested in the matter in Scotland. There was the Endangered Species (Import and Export) Act 1976 under which the Department of the Environment operates control on the import of skins and other derivatives of wildlife species.
I hope that the House will not think that I am shirking my responsibilities, but the responsibilities of the Department of Trade are marginal to the whole question. We are delighted to play our part in advancing causes which the House has at heart and which have been so ably articulated by my two hon. Friends.
The Department of Trade has played its part because in June 1980 my predecessor introduced an order under the Trade Descriptions Act 1968 under which all sealskin goods offered for sale have to be marked with the place from which the seal was taken. That was a considerable step forward. It enabled people to exercise their judgment on whether they wished to buy sealskin products. The order was welcomed by the many organisations that have been involved in the campaign on this subject. I do not want to pretend that they thought that it was an end to the subject. They wished to move on to a complete ban. It was in conformity with our traditions that people should be given the fullest opportunity to know exactly what it was they were buying and to exercise their judgment on whether to buy such products in the knowledge that the seals may have been killed in the unattractive way that my hon. Friends have described. Public opinion was focused by the media on the question as it affected baby harp and hooded seals culled in Canada. The essential problem is on the other side of the Atlantic. We are merely anxious to do what we can to make our feelings known.
The Government have taken every opportunity to make the sentiments generally expressed well known to the Canadian Government. There will be sensitivities across the other side of the Atlantic on the question. My hon. Friends have drawn attention to the Canadian feelings on fisheries protection and how they may respond if the European Community acted in a certain way.
The Government have made the strength of feeling known to the Canadian Government through the high commission in London. My noble Friend the Secretary of State for Trade, who a few days ago returned from Canada, also took the opportunity to make the strength of public feeling known. By a fortunate coincidence I shall have the privilege of meeting the Canadian director general of fisheries this afternoon. I shall take the opportunity to emphasise the sentiments eloquently voiced in the Chamber for transmission to his colleagues in Canada.
The issue was properly taken up in the European Parliament in March. A resolution was passed requesting the Commission,
following the example of the United States, the Netherlands and Italy and taking into account the actions of retail traders in France, to introduce, by means of regulation, a ban on Community imports of all skins and products derived from young hooded and harp seals and on these and other products corning from seals whose stocks are depleted, threatened or endangered".
The third part of the resolution commended the action that the Government had taken. It suggested that
all seal products imported into the Community are clearly marked as made of or derived from seal skin, indicating the type of seal and where the seal was killed.
That is the basis of the order laid in 1980 under the Trade Descriptions Act by my predecessor. To a degree, he can be said to have anticipated what was in the mind of the European Parliament.
Since my hon. Friends and the European Parliament have drawn attention to what other countries have done,

I shall refer briefly to those countries in case it should be thought that we have been slower or less sensitive. In France, there is no official import ban but there has been voluntary action by the furriers, who have said that they will not use the skins of baby harp and hooded seals. In Italy, there is a ban on the import of sealskins but it is restricted to pelts of a very small size. With all respect to our Italian friends, I am not sure whether it is an effective ban. It certainly would not satisfy my hon. Friends In Holland and the United States there are bans but they are not specifically aimed at baby harp or hooded seals. They cover almost all seals. In the United States the marine mammals protection legislation of 1972 covers all marine mammals. It is not a specific ban. There may be a ban in Sweden but in the time available I have not been able to discover its basis and scope. I realise that more may need to be done in this connection, but I think that we can say, without undue modesty, that we have not lagged behind our neighbours.

Mr. Shersby: I am sure that the Government are not lagging behind, but can my hon. and learned Friend give me an assurance that the Government are keeping the matter very much in mind and will examine what other ways are open to them, either to discourage the Canadian Government from permitting the practice of clubbing seals, or to consider whether there are other ways in which we could discourage the practice, without causing any breach in relations with our Canadian friends?

Mr. Rees: We shall, of course, watch developments in this connection closely, as well as developments in other countries. I am very sorry that I have been unable to discover exactly what is in force in Sweden, but as my hon. Friends will appreciate, I had barely an hour's notice in which to master the details of this subject, although I am familiar with the outline, having signed many letters to my colleagues and even to you, Mr. Deputy Speaker—the House knows of your concern in the matter—and I was not, therefore, able to cover some of the more recondite aspects. Certainly, the Government will keep themselves informed.
That brings me back to the aftermath of the important debate and resolution in March of this year in the European Parliament. I have drawn attention to only two aspects of that resolution, but there were many others. The resolution was forwarded to the Council of Ministers for information, and to the European Commission for any action that it thought appropriate. I was pressed by my hon. Friends about whether we had been in touch with the Canadian Government. I understand that the Commission has been in touch with the Canadian Government, and it has explored with that Government the possibility of devising proper methods of policing the seal cull—I hope that this will encourage my two hon. Friends—to see whether more humane methods of killing could be devised, if and when a cull proves to be necessary. For the moment, I am not arguing about whether the harp or hooded seals deserve to be culled. That is the next important point.
As the House will be aware, there is a Washington convention on trade in endangered species of wild flora and fauna. It was first signed in March 1973, and this country is a signatory to it. It is a most important convention. Various species are to be found in the annex, but unfortunately not yet the harp or hooded seal. The


Commission feels that the proper way to proceed, if it was thought appropriate, would be to add various categories of seal, particularly the harp and hooded seal, to the annexes to the convention, and then recommend some form of European Community regulation. That is very much in the Commission's mind, and Her Majesty's Government would welcome that approach.
Following that, the Commission asked the Nature Conservancy Council in this country—it is a great tribute to that organisation to be singled out for this job—to update its previous report on seals, with particular emphasis on the harp and hooded seals. I understand that the report has just been handed to the Commission, and I believe that a copy has just been given to my right hon. Friend the Secretary of State for the Environment, who is responsible for implementing the Washington convention. I am not trying to shirk any responsibility on the part of the Department of Trade, but constitutionally it is a matter for my right hon. Friend. I know that he and the Commission will study closely the updated report of the Nature Conservancy Council. It is, therefore, singularly appropriate that this House have an opportunity to debate this subject—although I accept that all hon. Members have not been quite so assiduous as my two hon. Friends in taking advantage of that opportunity—and to express a view before a final decision is taken about what action

could be taken by the Commission, the Council of Ministers or Her Majesty's Government, in the light of that updated evidence.
I hope that the House will recognise that neither the European Commission nor the Government have been dragging their feet on this issue. We recognise the considerable feeling that exists not only in the House but outside. But it is right to proceed in a proper manner. A unilateral ban by this country would not be totally effective, as I am sure hon. Members recognise. If every country of the Community focuses on the issue, there is a greater chance of achieving a solution that can have some practical impact an this delicate and sensitive question.
I congratulate my hon. Friends. I hope that I have been able to assure them that action is being taken and that this is a singularly appropriate moment for us to register our views. My right hon. Friend the Secretary of State for the Environment, who has particular responsibility for conservation matters, my right hon. Friend the Home Secretary, who is responsible for licensing under the Conservation of Seals Act, and myself, will take careful note of what has been said and written to us. I can assure the House that it is not my intention that this important and sensitive problem should be brushed under the table.

Question put and agreed to.

Adjourned accordingly at one minute past Two o' clock.